Forex Today: AUD capped by China trade, US retail sales, PPI eyed

The Asian session witnessed a phase of consolidation across the fx board, as the US dollar stalled its recovery and traded around a flat-line versus most of its majors. On the data-front, we had the release of China’s trade balance, which revealed both exports and imports fell below estimates in December. Besides, Fed Chair Yellen’s speech during Tokyo open also failed to impress markets, as she spoke little on the monetary policy program.

In the day ahead, the EUR calendar remains data-quiet, with the only BOE Credit conditions survey expected to be published. While BOE MPC member Saunders speech will be closely eyed for fresh impetus on the sterling. While the NA session is expected to be action-packed with the crucial US retail sales and PPI data to be followed by consumer sentiment release. Also, we have FOMC member Harker’s speech on economic mobility, in Philadelphia.

Main topics in Asia

Fed's Yellen Q&A: Fed focus on low unemployment, stable inflation

Fed's Yellen, now answering a round of Q&A, notes that the Fed focus is on low unemployment, ensuring that the labor market remains strong, while keeping inflation low and stable. 

Japan EcoMin's Ishihara: We will continue to monitor the yen closely for any rapid rises

Japanese economy minister Ishihara was on the wires last hour, via Reuters, noting that the government will continue to monitor closely for rapid rises in the yen.

China's Dec trade data soft, exports decline

China's trade balance for December, in yuan terms, came in at 3.35bn CNY vs 344.5bn expected and 298bn last. 

PBOC is reportedly stepping up yuan curbs with banks – BBG

The Chinese central bank, PBOC, has apparently asked the state banks to balance capital flows, by boosting inflows and curbing outflow, in yet another attempt to stem Yuan outflows, Bloomberg quotes sources familiar with the matter.

Key focus for the day ahead

EUR/USD: Minor-recovery on 1.06 handle capped by daily pivot

Next of note for the major remains the second-liner data in the form of Germany’s WPI numbers, while the main risk events remain the US dataflow and Fed official Harker’s speech due on the cards in the NA session.

Goldman Sachs on GBP: Risks tilted in direction of a sharper decline on Article 50 trigger

“We see the path for the British Pound as a function of two things. First, there is the question of where GBP/$ would trade in the event of a "hard Brexit." 

USD/CAD: headed to 1.3500? - Rabobank

Analysts at Rabobank explained that since the US election on November 8 the CAD has rallied 1.8% vs. the USD mostly on the back of the improvement in oil prices though better than expected domestic jobs data and trade data have also brightened the outlook.

Australia: Key events in the week ahead - ANZ

Economists at ANZ banks posted in their latest research report, key Australian events to what out for next week.

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