Technical Analysis

ForexLive European FX news wrap: SNB and BOE deliver on expectations, ECB up next


Headlines:

Markets:

  • USD leads, AUD lags on the day
  • European equities lower; S&P 500 futures down 1.0%
  • US 10-year yields down 2 bps to 3.464%
  • Gold down 1.6% to $1,778.53
  • WTI crude flat at $77.31
  • Bitcoin down 0.7% to $17,706

The focus of trading today is centered around key central bank decisions and we saw the SNB and BOE deliver on expectations, by raising their respective policy rates by 50 bps.

But the market moves were less than straightforward as we are still in the midst of digesting the post-Fed narrative, with equities falling as we got into European trading earlier.

The retreat in Wall Street yesterday reverberated and US futures caught on quickly to fall from flat levels to now being down 1% on the day. In turn, that dragged other major currencies down along with it as the dollar roared back after having gave up gains following the Fed yesterday.

Don’t say I didn’t warn you.

USD/JPY moved higher despite Treasury yields still looking a little heavy (risk-off perhaps playing a part), not really helped by the BOE’s dovish response of course. The pair is up 0.7% to 136.40 levels with the high coming in around 136.90 earlier in the session.

Meanwhile, EUR/USD is down 0.6% to 1.0620 while GBP/USD was down to 1.2330 going into the BOE decision before falling to 1.2284 and then now holding around 1.2320 levels again – still down 0.8% today.

The antipodeans are hit the hardest amid the selloff in risk, with AUD/USD down 1.5% to 0.6760 and NZD/USD down 1.3% to 0.6370 currently.

The ECB will complete the triple header in European trading today, and Lagarde & co. is very much expected to make good in similar fashion to the SNB and BOE by delivering a 50 bps rate hike as well.

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