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Volatile Session Results In Euro Weakness Amid Fresh Lockdown Concerns

FOREX
  • A fresh wave of euro weakness to kick off the US trading session on Friday saw EURUSD make fresh weekly lows, printing 1.1250.
  • Renewed virus concerns in Europe benefitted safe haven FX and as such, EURJPY came under significant pressure, trading below 1.28 for the first time in 2 months, just shy of the August/September lows residing at 1.2793/4. In unison, EURCHF extended below the 1.0505 break level down to 1.0448 at its worst point.
  • Despite the significant weakness, the Euro did find some support and volatile price action sparked a strong recovery off the early NY session lows. Two main reasons behind the bounce were some slightly more firm remarks from Weidmann on inflationary persistence as well as the German Foreign Minister excluding any national lockdowns.
  • EURUSD rose back above 1.13 while EURJPY completed a +100 pip recovery above the 129 handle before both pairs settled a little lower into the close.
  • With bouts of equity weakness and heavy energy prices, the dollar was a beneficiary overall on Friday, with the dollar index gaining 0.5%. This erases the majority of Wed/Thu losses and keeps the greenback in strong positive territory for the week.
  • Given the strong performance of haven FX, AUD and NZD naturally gravitated around 0.6% lower throughout the day.
  • A light data calendar to kickstart next week, before European Flash PMI data headlines Tuesday's docket.
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