Europe FX Handover – 25th April 2019

  • The US dollar remained the strongest major currency, which saw the EUR/USD hit a new multi month low below 1.1125, while the GBP/USD slipped below 1.2870 and Aussie took out 0.7000 handle. The Japanese yen also remained among the top performers.
  • Central bank recap: (1) The Bank of Japan made a series of tweaks to its massive QQE stimulus programme, including putting a date on the “extended period” for which it intends to keep rates low – spring 2020 – but the governor said he is not hopeful inflation will reach the bank’s 2% target any time soon, underscoring concerns the BOJ has run out of ideas and tools for stimulus. Hence or otherwise the USD/JPY has remained downbeat despite widespread dollar rally. (2) Sweden’s Riksbank promised to keep rates steady longer than previously expected and announced an 18-month bond-buying programme to start from July — the Swedish Krona fell sharply on the back of this. (3) USD/TRY: Turkish lira dropped 1% after the CBRT removed pledge to tighten policy. Other EM currencies have also remained under pressure, including the Indian Rupee.
  • Gold and silver struggled to add to their gains from yesterday amid the dollar strength, while US stock index futures traded mixed after mixed-bag earnings with DJIA being lower and tech-heavy Nasdaq 100 futures higher. European markets were lower but off their worst levels.

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