ForexLive European FX news wrap: Dollar gains as risk appetite gets sapped again

<p>Headlines:</p><ul><li><a href="https://www.forexlive.com/news/usdjpy-stays-underpinned-by-higher-bond-yields-so-far-on-the-week-20240103/">USD/JPY stays underpinned by higher bond yields so far on the week</a></li><li><a href="https://www.forexlive.com/news/risk-trades-getting-squeezed-once-again-ahead-of-us-trading-20240103/">Risk trades getting squeezed once again ahead of US trading</a></li><li><a href="https://www.forexlive.com/news/gold-off-to-a-poor-start-in-january-trading-this-year-20240103/">Gold off to a poor start in January trading this year</a></li><li><a href="https://www.forexlive.com/news/germany-december-unemployment-change-5k-vs-20k-expected-20240103/">Germany December unemployment change 5k vs 20k expected</a></li><li><a href="https://www.forexlive.com/news/switzerland-december-manufacturing-pmi-430-vs-421-prior-20240103/">Switzerland December manufacturing PMI 43.0 vs 42.1 prior</a></li><li><a href="https://www.forexlive.com/news/us-mba-mortgage-applications-we-29-december-107-vs-15-prior-20240103/">US MBA mortgage applications w.e. 29 December -10.7% vs -1.5% prior</a></li><li><a href="https://www.forexlive.com/news/china-allegedly-tries-to-keep-it-hush-on-growing-demographic-worries-20240103/">China allegedly tries to keep it hush on growing demographic worries</a></li></ul><p>Markets:</p><ul><li>GBP leads, JPY lags on the day</li><li>European equities lower; S&amp;P 500 futures down 0.4%</li><li>US 10-year yields up 2.3 bps to 3.972%</li><li>Gold down 0.7% to $2,045.48</li><li>WTI crude up 0.7% to $70.85</li><li>Bitcoin down 5.8% to $42,555</li></ul><p>The session started off quietly before traders resumed the price action from yesterday. The dollar was bid across the board while equities sagged, with bond yields sitting a touch higher on the day. The bid in the greenback also led to a fall in gold and as risk trades soured, Bitcoin also took a quick hit from $45,000 to a low of $40,625 before a light bounce to $42,000 levels now.</p><p>USD/JPY continued to retrace higher in a push to near 143.00 while EUR/USD is down another 0.2% to 1.0920 currently. USD/CHF is also keeping a modest rebound this week, up another 0.4% to 0.8530.</p><p>Commodity currencies are also struggling again with AUD/USD in particular down 0.4% to 0.6730 as risk trades are on the defensive.</p><p>S&amp;P 500 futures are now down 0.4% with Nasdaq futures down 0.6%, and that is leading a bigger decline in European stocks as well on the day. Major indices in Europe are now down over 1% as the squeeze gathers pace to start the new year.</p><p>In other markets, gold also stumbled from $2,065 to $2,045 at the moment while oil is in a bit of a wrestling match once again in and around its 200-week moving average at $70.84.</p>

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