ForexLive European FX news wrap: Dollar sluggish as equities gain, UK retail sales awful

Headlines:

Markets:

• AUD leads, GBP lags on the day
• European equities higher; S&P 500 futures up 0.4%
• US 10-year yields down 1 bps to 4.134%
• Gold up 0.5% to $2,033.42
• WTI crude flat at $74.07
• Bitcoin up 0.6% to $41,290

It was a more tentative session for major currencies as the dollar is sitting a bit more mixed across the board so far today. Traders are lacking any strong convictions but there is a clear theme of sorts at least, even after the push higher in bond yields yesterday.

USD/JPY raced higher to 148.80 in the handover from Asia to Europe but quickly fell off before hovering around 148.10-20 levels for the most part during the session. That comes with 10-year yields in the US dipping from 4.17% to 4.13% on the day.

Besides that, the pound was in focus after a rather abysmal UK retail sales data for last month. The data saw the sharpest fall in retail sales since the pandemic and that dragged GBP/USD down from 1.2695 to 1.2665, before holding just off the lows in sideways trading after during the session.

And despite more sluggish sentiment in Chinese stocks, the aussie was buoyed this time around as it is helped by better risk sentiment in European and US equities. S&P 500 futures are up 0.4% as the index looks set to try and take a run at the 4,800 mark and that is helping with the broader market mood today.

AUD/USD is up 0.4% to 0.6595 as commodity currencies in general look to defy the dollar’s early week advance as noted here.

In other markets, gold is also making some headway in a push to $2,033 as it pushes past key near-term levels. And Bitcoin is looking to stabilise itself after a drop to near $40,000 yesterday as it hovers around the mid-December to January lows for now.