Forex today experienced some volatility in Asia this Thursday, thanks to broad-based US dollar strength induced by escalating US-China trade tensions. The latest US tariffs on the Chinese imports took effect at 0401 GMT, further fuelling risk-off trades across the financial markets.
Among the G10 currencies, the Aussie was hit the hardest and breached the 0.7300 level amid US tariffs, tumbling copper prices and the Australian political turmoil, as PM Turnbull denied to face the leadership challenge due later today. The higher-yielding currencies, the Kiwi and the GBP followed suit amid risk-aversion while the common currency faced rejection at 1.16 handle and dropped back to 1.1550 region. Meanwhile, the safe-haven Yen failed to benefit from cautious tone seen around the Asian equities and subdued oil prices.
Main topics in Asia
Moody’s: US-China trade tensions likely to deteriorate this year, could deter growth
The US-based ratings agency, Moody’s Investors Service, highlighted the following risks likely to emerge from the US-China trade war.
Australian FinMin Cormann tendered his resignation - Reuters
Reuters reported earlier today that amid PM Turnbull’s leadership challenge, the country’s Finance Minister Mathias Cormann tendered his resignation.
Australian parliament adjourned until September 10
Headlines are crossing the wires, via Reuters, citing that the Australian parliament is adjourned until September 10.
Trump: US to closely study South Africa’s land and farm seizures - Twitter
The US President Donald Trump took to Twitter this Thursday morning, commenting on the South African large-scale killing of farmers.
Australia’s PM Turnbull is on the wires now, via Reuters, addressing the press conference, with the key headlines found below …
China’s Commerce Ministry: Will continue to fight back the US tariffs
No sooner did the new US tariffs on the Chinese imports kick-in at 0401 GMT today, the Chinese Commerce Ministry came out on the wires, with bold statements opposing the US tariffs.
Key Focus ahead
Markets eagerly look forward to a slew of manufacturing and services PMI reports due for release from the Euro area economies that will start trickling in from 0715 GMT onward, marking the first significant Eurozone macro news reported so far this week. At 0730 GMT, the ECB policymaker Weidman’s speech will be eyed ahead of the ECB monetary policy meeting minutes due at 1130 GMT. Also, of note remains the only release from the UK docket for today, the CBI realized sales report.
The NA session also has plenty of economic news lined up, including the US jobless claims, new home sales, Markit services and manufacturing PMI data. Besides data, the Jackson Hole Economic Policy Symposium begins today, with several central bankers due to speak over the coming days.
EUR/USD rejected at falling trendline, focus on Eurozone PMIs and Italian 10-yr yield
The EUR/USD could extend the decline to 1.15 if the German and Eurozone PMIs, scheduled for release today, show the trade war is having a negative impact on the Eurozone economy.
GBP/USD looks to test 5-DMA support, US-China trade row in focus
The GBP/USD pair is looking to extend its corrective slide from eleven-day tops of 1.2936, as the US dollar pullback deepens on souring risk-sentiment, in the wake of the new US tariffs on the Chinese imports.
How to trade a Trump impeachment in 3 phases with the US Dollar
US President Donald Trump worked with Michael Cohen for 12 years. The personal lawyer was also a "fixer" that saved his boss from significant embarrassments, both personal and business.
The Jackson Hole symposium - could be a non event - Nomura
Analysts at Nomura explained that they could glean some important implications to monetary policy from the Jackson Hole but we see it as unlikely to be a big market driver.
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