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

<p>Headlines:</p><ul><li><a href="https://www.forexlive.com/news/usdjpy-erases-early-advance-to-fall-flat-on-the-day-now-20240119/">USD/JPY erases early advance to fall flat on the day</a></li><li><a href="https://www.forexlive.com/news/us-futures-race-higher-as-equities-look-to-keep-the-rebound-going-20240119/">US futures race higher as equities look to keep the rebound going</a></li><li><a href="https://www.forexlive.com/news/traders-step-up-boe-rate-cut-bets-but-only-slightly-20240119/">Traders step up BOE rate cut bets but only slightly</a></li><li><a href="https://www.forexlive.com/news/uk-december-retail-sales-32-vs-05-mm-expected-20240119/">UK December retail sales -3.2% vs -0.5% m/m expected</a></li><li><a href="https://www.forexlive.com/news/germany-december-ppi-12-vs-05-mm-expected-20240119/">Germany December PPI -1.2% vs -0.5% m/m expected</a></li><li><a href="https://www.forexlive.com/news/global-central-bank-policy-pivot-will-be-broad-but-not-sharp-says-fitch-20240119/">Global central bank policy pivot will be broad but not sharp, says Fitch</a></li></ul><p>Markets:</p><ul><li>AUD leads, GBP lags on the day</li><li>European equities higher; S&amp;P 500 futures up 0.4%</li><li>US 10-year yields down 1 bps to 4.134%</li><li>Gold up 0.5% to $2,033.42</li><li>WTI crude flat at $74.07</li><li>Bitcoin up 0.6% to $41,290</li></ul><p>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.</p><p>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.</p><p>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.</p><p>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&amp;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.</p><p>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 <a href="https://www.forexlive.com/news/dollar-fails-to-seal-the-deal-against-the-commodity-currencies-this-week-20240119/" target="_blank" rel="follow">here</a>.</p><p>In other markets, gold is also making some headway in a push to $2,033 as it pushes past <a href="https://www.forexlive.com/news/gold-returns-towards-a-test-of-key-near-term-levels-again-20240119/" target="_blank" rel="follow">key near-term levels</a>. 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.</p>

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