Forex Today witnessed a quiet Asian affair, with mild risk-on prevalent amid higher Asian equities, oil prices and Treasury yields. However, the Yen defended minor bids across the board amid ongoing developments surrounding Syria while gold prices traded on the back foot. The Antipodeans lost ground and extended losses following the release of dovish RBA March meeting minutes and mixed Chinese data releases.
The Kiwi emerged the weakest in Asia while the GBP/USD pair hit the highest levels since the Brexit referendum at 1.4354 amid an upbeat outlook for wages and increasing BOE rate hike expectations.
Main topics in Asia
Mexico's Guajardo: NAFTA is progressing, but doesn't expect an announcement on Thursday
Mexico's Economy Minister, Ildefonso Guajardo Villarreal, is hitting wires with comments about the NAFTA talks progress, as well as concerns about economic activity following tariffs.
US delays fresh sanctions on Russia - Reuters
According to reporting by Reuters, Trump's administration has delayed new sanctions against Russia.
Deal with EU or no deal with EU: China tells US - Times
British trade negotiations with China will face “great uncertainties” if the nation fails to reach a Brexit deal, Beijing’s top diplomat in Brussels has warned, according to The Times.
US: Russia, Syria may tamper with Douma evidence - Reuters
As reported by Reuters, the US accused Russia of interfering with international attempts to gain access to the Douma attack site of last weekend's chemical weapons strike …
China Q1 GDP steadies at 6.8 percent y/y, beats estimates
China's YoY GDP figures for the first quarter of 2018 came in at +6.8% vs +6.7% exp and 6.8% previous, with the QoQ reading for Q1 coming in at +1.4% vs +1.5% exp and +163% last.
RBA minutes: Board agreed there was not a strong case for near-term move in policy
The minutes of the Reserve Bank of Australia (RBA) April monetary policy meeting released today showed the policymakers see little reason for a near-term move in policy.
GBP/USD hits fresh post-Brexit referendum high at 1.4354
There is no stopping the GBP/USD freight train. The currency pair rose to 1.4354 in Asia - the highest level since June 2016.
Key Focus ahead
Today’s EU macro calendar is expected to be a busy one, with the UK labor market report due on the cards at 0830 GMT. The UK’s average earnings data is expected to be closely eyed for fresh insights on the Bank of England’s (BOE) rate hike outlook. Also, in focus remains the ZEW economic sentiment surveys due out from Germany and the Eurozone, with weaker readings likely to cap the ongoing rally in the EUR.
In the NA session, the US housing data will be published alongside the Canadian manufacturing sales data. Meanwhile, the US industrial production data will drop at the same time the FOMC members William and Quarles will be making their respective speeches. Traders will also look forward to New Zealand’s (NZ) GDT price index data for fresh direction on the Kiwi ahead of Thursday’s NZ CPI release.
EUR/USD on solid ground as US Y-yield curve hits fresh 10.5-year low
The EUR/USD pair rose to 1.2395 on Monday as the spread between the US 10-year treasury yield and the 2-year treasury yield narrowed to 45.5 basis points - the lowest level since October 2007.
GBP/USD breaking new ground as it looks for 1.44 ahead of UK jobs
The focus for the London Tuesday session will be the GBP's Average Earnings being reported at 08:30 GMT. Average Earnings excluding bonuses is expected at 2.8 percent versus the previous 2.6, while earnings including bonuses is forecast at 3.0 percent compared to the previous reading of 2.8.
Geopolitical Tension Could Be Catalyst for Gold’s Rally
Technically, the long-term technical picture appears bullish and the current geopolitical turmoil could be the catalyst needed for the next leg up.
Oil prices on track for a tumble in H2 2018 - Barclays
In an interview with CNBC's "Squawk Box" late-Monday, Barclays' Head of Energy commodities research, Michael Cohen noted that he expected oil prices to remain elevated during the summer driving season, but …
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Editors’ Picks
AUD/USD flat lines around 0.6500 ahead of Australian employment details
AUD/USD oscillates around the 0.6500 mark during the Asian session on Thursday, awaiting Australian jobs data before a firm intraday direction. Trade uncertainties, rising geopolitical tensions, and the Fed's hawkish pause weigh on investors' sentiment. This, in turn, acts as a headwind for the risk-sensitive Aussie.
USD/JPY struggles below 145.00 amid reviving safe-haven demand
USD/JPY remains depressed below the monthly peak retested the previous day as a softer risk tone benefits JPY. USD struggles to capitalize on the post-FOMC rise to a fresh weekly high, which weighs on the currency pair. However, reduced bets for another BoJ rate hike in 2025 hold JPY bulls from placing new bets and limit deeper losses.
Gold price bounces off weekly low; bulls seem reluctant amid hawkish Fed
Gold price attracts some dip-buyers during the Asian session and reverses part of the previous day's slide to the weekly low amid a revival of safe-haven demand, bolstered by trade uncertainties and rising geopolitical tensions. Moreover, a subdued USD price action acts as a tailwind for the bullion.
Australia unemployment rate expected to signal a broadly stable labor market
The Australian Bureau of Statistics will release the May monthly employment report at 01:30 GMT on Thursday. The country is expected to have added 25K new job positions, while the Unemployment Rate is projected to hold steady at 4.1%.
In the Eurozone, inflation is also a monetary phenomenon
Monetary aggregates continue to be closely monitored by the European Central Bank (ECB), a sign that, despite the passage of time and the increasing complexity of financing circuits, quantitative theory remains relevant.
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