Forex today was driven by the sentiment around the US dollar and Treasury yields, as major fx pairs eagerly awaited fresh clues from Wednesday’s Fed policy outcome. Among the Asia-pac currencies, the Yen remained near multi-week lows against its American counterpart, while the Kiwi remained strongly bid, in the wake of repositioning ahead of the NZ GDT price index and national election. Meanwhile, the Aussie rallied to test 0.80 handle on an unexpected rise seen in the Aus HPI gauge. However, the spot failed to sustain at higher levels, as the RBA minutes cautioned on rising household debt and lower price pressures.
Main topics in Asia
RBA minutes: Further rise in AUD would result in slower pickup in growth, inflation
The Reserve Bank of Australia (RBA) minutes from Sept 5th monetary policy meeting is out, highlighting that a further rise in AUD could lead to slower pickup in growth and inflation.
Australia House Price Index (QoQ) dipped from previous 2.2% to 1.9%
US Senate Republicans weight $1.5 Trillion tax cuts for budget
News is crossing the wires this Tuesday morning that US Senate Republicans are considering a $1.5 trillion tax cut for a budget.
China Foreign Minister - North Korea issue must be resolved peacefully
Comments from China Foreign Minister crossing the wires via Reuters…
US Senator Gardener wants North Korea out of the UN
In a letter seen by Reuters that will be sent to ambassadors from China and 20 other countries, Republican Senator Cory Gardner, the US Senate’s East Asia subcommittee chairman, urged to cut off ties with North Korea …
Key Focus ahead
Heading into Europe, all eyes remain on the Eurozone current account and German ZEW economic surveys, while the UK docket remains data-empty for the second straight session today. The NA session remains quite eventful, with plenty of risk events on the cards, including the Canadian manufacturing sales, NZ GDT price index, US housing and current account data.
EUR/USD: 1.2000 still on sight ahead of German ZEW?
The EUR/USD pair remained better bid in the Asian trades this Tuesday, having found some support from weaker Treasury yields, while investors eagerly await the German ZEW surveys for fresh impetus.
GBP/USD: Two-year yield spread ignores less hawkish Carney, dips to be short lived?
GBP/USD pair dropped nearly 1% on Monday to an intraday low of 1.3465 after Bank of England [BOE] Governor Mark Carney said any increases in UK interest rates in the coming months will be "gradual" and "limited".
UK PM May calls special Brexit cabinet meeting
The UK Times reported overnight that the UK PM Theresa May has called a special Brexit cabinet meeting, Livesquawk cites.
PBOC to meet Tuesday to discuss preliminary plan of big financial liberalisation measures
Reuters quoting people familiar with the matter, citing that People's Bank of China (PBOC) is likely to hold a meeting on Tuesday to discuss preliminary plan of the big financial liberalization measures.
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EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
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Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
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Week ahead – US GDP and BoJ decision on top of next week’s agenda
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