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.