There isn’t all too much conviction in markets for the time being but there are some decent moves in European morning trade.
The dollar is keeping more mixed with the euro and pound coming under pressure against the greenback, with the former not getting much help from the ECB yesterday. There is plenty of market chatter about fragmentation risks and it isn’t going to go away any time soon.
That has also dragged down European stocks despite US futures looking more tepid. European indices are down by over 1% across the board with Italy’s FTSE MIB leading the drop, down by over 2.7% as the BTP-Bunds spread climb.
EUR/USD is now dragged to session lows, pushing towards 1.0590 as sellers look to solidify a drop below the recent consolidation range:
The pound is also down 0.3% to 1.2450 and is testing daily support around 1.2458-71 with the week’s low at 1.2430 also a key support level to watch out for. Meanwhile, USD/JPY has recouped its drop from earlier in a push back up to 133.90 levels:
Elsewhere, the dollar is trading higher against the loonie after the jump yesterday with USD/CAD up another 0.3% to 1.2735 on the day. The greenback is trading down against the aussie and kiwi though with the former moving up to 0.7115, up 0.3% against the dollar currently.
US futures are looking more tepid and tentative, so I’m not going to read much into the aussie and kiwi moves for now. It’s all about how markets will digest the US inflation data later but I fear that yesterday’s jitters will not be easily forgotten before the weekend.
This article was written by Justin Low at www.forexlive.com.
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