Europe Summary and Highlights 24 February
The USD was generally firmer through the European morning, with the EUR losing the most ground, reversing most of the overnight gains seen after the German election result.
European morning session
The USD was generally firmer through the European morning, with the EUR losing the most ground, reversing most of the overnight gains seen after the German election result. EUR/USD dropped 30 pips to 1.0480, while USD/JPY gained around 20 pips to 149.60, and most other pairs saw similar losses against the USD of around 0.1-0.2%.
The EUR wasn’t helped by a weaker than expected German IFO survey which showed only a marginal rise in February in the business climate index, and a drop in the current conditions index. Otherwise there was little news, with the final Eurozone January CPI data unrevised at 2.7% y/y.
Asia session
Headlines crossed the wire that German’s CDU/CSU has secured majority with the far right performing worse than expected. The Euro is cheering on potential more market friendly coalition and see EUR/USD opened 10 pips higher and is trading 0.58% higher at 1.0517. GBP/USD is also 0.31% higher at 1.2675.
The BoJ does not seem to be worried about a slow grind higher in JGB yields unless it is an abrupt spike. It is understandable as it will be counterintuitive if the BoJ is looking towards further tightening but not higher yields. There was worry in the market that there will be an imminent intervention but such was already reversed on Friday as haven bids saved JPY. The USD/JPY is consolidating the moves and see it trading 0.03% at 149.27.
U.S. major equity indexes are in the green, so as Nikkei while Chinese and Hon Kong equities lag. AUD/USD is trading 0.38% higher at 0.6390, NZD/USD is also 0.29% higher at 0.5758 while USD/CAD slipped 0.24% as USD is broadly lower.