ForexLive Asia-Pacific FX news wrap: EUR/USD gapped higher (not a huge gap) – ForexLive

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EUR/USD opened for trade in very early Asia time (just New Zealand active) around 15-20 points higher than where it finished up late on Friday. This is not an epic gap up, but hey, its what we got. The news of impact for the euro was the result of the first round of the election in France, where the far-right National Rally is on track to win around 34%
Without getting too deeply into French politics, the next, and final, round of voting is on July 7. If the results are similar there are a number of potential scenarios, including a hung parliament, an alliance of parties to block the far-right from reaching government, or a win for Le Pen’s rightists. There are many permutations, feel free to argue politics in the comments.
However, why did the euro pop? Again, feel free to argue politics, but the likely outcome as seen by investors is a more market-friendly government regardless of a far-right or centrist alliance, win. A far-right win is, prima facie, market friendly. Whereas an alliance between the centre and left is expected to see leftists dial back less market friendly policies in order to govern.
I’m not sure I am comfortable with either of those narratives, I think a period of instability is most likely but so far that’s not the dominant theme.
USD/JPY is little changed on the session. It had risen back above 161.00 in early Tokyo trade but that’s been unwound. We aren’t talking big moves though.
Hong Kong markets were closed today for a holiday, Hong Kong Special Administrative Region Establishment Day. This was the day in 1997 when Communist China resumed control of Hong Kong from the UK when the lease expired.
Elsewhere in the region, South Korea posted its largest monthly trade surplus in nearly 4 years.
China’s 1-year interest rate swap fell to its lowest since June of 2020. Yields on 10- and 30-year Chinese government bonds hit new record lows.Over the weekend the official PMIs were poor; manufacturing stayed in contraction while services expanded as a slower rate. Today we had the private, Caixin/S&P manufacturing PMI, which was better. More in the points above on this.
Bitcoin rose back above 63500 USD:
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