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ForexLive European FX news wrap: Pound shakes off some Brexit negativity

Forex news from the European trading session – 24 September 2018

Headlines:

Markets:

  • GBP leads, NZD lags behind on the day
  • European equities lower on the day
  • Gold up 0.03% to $1,199.38
  • WTI up 1.65% to $71.96
  • US 10-year yields up 1.3 bps to 3.076%
  • Bitcoin down 1.63% to $6,599

The session started off with focus on the US-China trade rhetoric, where talks have reportedly broke down over the weekend, and that weighed on equities and the aussie and kiwi as the day began. The session started off with both currencies on the back foot while other major currencies were still trading sideways for the most part.

Then, the dollar and yen caught a bit of a bid as E-minis fell. EUR/USD moved to a low of 1.1724 from 1.1750. But the move was quick to reserve as E-minis and Treasury yields started moving higher resulting in a weaker dollar and yen. EUR/USD inched higher towards 1.1760.

But in between all of that, the pound caught a quick bid following UK Brexit secretary Raab’s comments that he is still confident of a Brexit deal. His comments aren’t anything new but pound traders look to be searching for a bone and they got one. GBP/USD rose from 1.3075 to 1.3110 before slowly inching higher as the session progressed to trade around the highs now near 1.3145.

The pound’s rise also helped to inadvertently drive up the euro as the dollar and yen remained tepid. EUR/USD rose to a high of 1.1775 and trades near the highs currently.

The US-China trade rhetoric is still very much felt in the equities space and despite some hints of a recovery in the aussie and kiwi, they remain underpinned and both AUD/USD and NZD/USD are trading in narrow ranges on the day. The former continues to sit in between 0.7260 and 0.7275 while the latter trades between 0.6660 and 0.6680.

The yen stays offered as Treasury yields look poised to continue their run higher today. USD/JPY rose to a high of 112.71 earlier and continues to trade around 112.55 to 112.70 ahead of US trading.

In the midst of all of this, oil prices rose to their highest levels seen since November 2014 following the OPEC+ meeting over the weekend. Brent continues to hold above $80 per barrel as OPEC+ members said they won’t be increasing output any time soon.

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