ForexLive European FX news wrap: No dollar follow up to the gains yesterday.. yet

Headlines:

• USD/CNY pushes above 7.30 for the first time since late 2023
• It’s been a real rough week for Chinese stocks
• Trump: Tariffs will make America wealthy again
• Germany December unemployment change 10k vs 15k expected
• UK November mortgage approvals 65.72k vs 68.50k expected
• Switzerland December manufacturing PMI 48.4 vs 48.3 expected
• China vows to sharply increase funding from treasury bonds to bolster growth this year
• Biden has decided to block Nippon Steel’s acquisition of US Steel – report

Markets:

• CHF leads, USD and CAD lag on the day
• European equities lower; S&P 500 futures up 0.2%
• US 10-year yields down 2.6 bps to 4.549%
• Gold up 0.1% to $2,659.10
• WTI crude down 0.4% to $72.84
• Bitcoin down 0.6% to $96,507

The dollar is not really following up on its strong start to the new year, at least so far today. While it is running higher against the Chinese yuan, it is taking a bit of a breather against the rest of the major currencies bloc. That said, the changes among them are relatively light as seen above.

The move against the yuan is a standout though with USD/CNY rising above 7.31 for the first time since November 2023. Falling yields in China and a poor start to the year for domestic stocks is compounding woes for investors there.

Besides that, the dollar isn’t up to much as it settles down after yesterday’s gains against the likes of the euro and pound especially. EUR/USD stuck around 1.0270-80 levels throughout, bound by large option expiries. Meanwhile, USD/JPY was also mostly little changed around 157.20-40 during the session.

This comes as US futures are once again sitting higher on the day. But as we have come to know, US trading will be a whole different ball game. Just look to yesterday for an example of that. In the case of equities, there has been a more sluggish mood in recent weeks and that looks to potentially carry over to the new year.

European indices are marked lower though, taking some shine off the better showing to start the new year yesterday.

It’s a Friday that doesn’t feel like a Friday. But once next week starts, expect markets to be back in full force. Until then, have a great weekend everyone!

This article was written by Justin Low at www.forexlive.com.