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ForexLive European FX news wrap: Dollar sags as bond yields hold lower on the week

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Headlines:

Markets:

  • AUD leads, USD lags on the day
  • European equities mixed; S&P 500 futures down 0.8%
  • US 10-year yields down 4.5 bps to 4.065%
  • Gold up 1.0% to $1,668.58
  • WTI crude up 1.0% to $85.12
  • Bitcoin up 2.1% to $20,611

The rally in bonds is continuing to put the dollar under pressure on the week, as a further retreat in Treasury yields sees the greenback slide past some key technical levels against the major currencies bloc.

EUR/USD moved up to parity for the first time in five weeks, up 0.5% to 1.0020 on the day, holding above the figure level with large option expiries also in play through to Friday. USD/JPY was marked down from 148.30 to 146.70 during the session as the dollar sagged, before recovering slightly to 147.00 at the moment.

The pound was a notable beneficiary early on as cable looked to come up for air in a push above 1.1500 for the first time in six weeks. The high reached 1.1620 before being pulled back, after UK finance minister Hunt announced a delay to the fiscal statement from 31 October to 17 November. That saw gilt yields climb as well as a result.

Elsewhere, USD/CAD is down by 0.5% to 1.3530 but off earlier lows of 1.3509 while AUD/USD is leading the charge – being up 1.3% to 0.6475 but off its earlier high of 0.6497. The positive momentum in commodity currencies comes despite a lack of optimism from equities, with S&P 500 futures and Nasdaq futures down heavily after Alphabet and Microsoft earnings misses.

The Bank of Canada will kick start the central bank bonanza over the coming eight days and that will be the key focus in markets over the next week or so.


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