ForexLive European FX news wrap: Dollar down, risk bets come alive amid Jackson Hole focus

Forex news from the European trading session - 23 August 2021

Headlines:

Markets:

• CAD leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.4%
• US 10-year yields up 1.7 bps to 1.277%
• Gold up 0.6% to $1,791.87
• WTI up 3.1% to $64.05
• Bitcoin up 3.4% to $50,340

It's all about the Jackson Hole focus as we get the new week underway, as market participants take to the summit going virtual as a signal that the Fed will not introduce any new language on taper expectations this week.

That is helping to provide some comfort to risk trades, which suffered quite a bit last week amid delta variant concerns. Equities are higher and we're seeing some unwinding in safety bets in bonds, as Treasury yields tick a little higher on the session.

In turn, that is pressuring the dollar and yen lower with commodity currencies leading the charge in the major currencies space.

USD/CAD is down 100 pips in a fall to 1.2715 from around 1.2770 at the tail-end of Asia Pacific trading, with the loonie helped by higher oil prices as the commodity also capitalised on a weaker dollar to be up 3% to $64.

In particular, CAD/JPY has risen from the dead as price is up over 1% today after Friday's dramatic turnaround to prevent a head-and-shoulders breakdown.

Both AUD/USD and NZD/USD are also posting solid gains of 0.7%, trading near the highs at 0.7185 and 0.6870 respectively ahead of North American trading.

Meanwhile, EUR/USD is back up above 1.1700 around 1.1710-20 levels on the session while GBP/USD kept steady around 1.3660-70 levels despite poor UK PMI data.

Elsewhere, gold is closing back in on $1,800 on a weaker dollar while Bitcoin finds itself in a good spot, holding above $50,000 since early trading today.

August 23, 2021 at 11:49PM
Justin Low
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