ForexLive European FX news wrap: Risk steadies ahead of the Fed

Forex news from the European trading session - 22 September 2021

Headlines:

Markets:

• CAD leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.5%
• US 10-year yields up 1.2 bps to 1.336%
• Gold down 0.1% to $1,772.20
• WTI up 1.5% to $71.50
• Bitcoin up 2.5% to $41,913

The market is sticking with the calmer tones since Asia Pacific trading, as Evergrande fears abate slightly after the firm said that it will be able to make bond repayments due tomorrow on 23 September earlier today here.

Equities are running with the perceived calm as European indices are posting decent gains while US futures are also seen up around 0.3% to 0.5% during the session.

FX was little changed overall as major currencies tilt slightly in favour of a more risk-on mood but did not stretch any boundaries in European morning trade.

EUR/USD is stuck in a narrow range around 1.1720-30 while USD/JPY did creep a little higher to 109.60 early on before sticking around 109.40-50 levels.

USD/CAD is pressured slightly lower, sticking around 1.2775-90 for the most part as commodity currencies keep light gains on the day amid the better mood.

AUD/USD is up a little and trading around 0.7250-60 levels with NZD/USD likewise up 0.3% and sticking around 0.7010-20 levels for the most part on the session.

As much as Evergrande fears may be cast aside for now, do be reminded that there are many more moving parts still at play when it comes to China and those risks are not ones that will settle down any time soon.

Evergrande may be a big name due to the focus on debt and credit risks but the cultural, political and economical shifts in China are perhaps bigger things to be wary about.

That aside, the market focus will now turn towards the Fed where we could be seeing taper hints come by Powell & co. in teeing up a move before year-end.

As much as equities may be looking comfortable now, best be reminded that sentiment can quickly turn as we saw with what happened in US trading yesterday.

September 22, 2021 at 11:58PM
Justin Low
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