Forex today in Asia was a quiet affair amid thin liquidity, as most major Australian banks were closed on account of the Bank holiday. Also, most majors preferred to remain in tight trading ranges amid a fresh round of Yuan selling against the greenback after the PBOC re-introduced a reserve requirement ratio.
The USD/JPY pair traded little changed around 111.30, as the Asian equity traded cautiously following the latest US-China trade spat while the Antipodeans remained on the back foot on a firmer US dollar but managed to derive support from higher iron-ore and oil prices. Both the EUR and GBP felt the heat of the looming political risks, in the face of the Brexit uncertainty.
However, the Canadian dollar witnessed good two-way trading in the Asian session and jumped to 1.3020 after Saudi Arabia announced that it froze all the trade investments in Canada.
Main topics in Asia
Saudi Arabia freezes all trade investment in Canada - Saudi Press Agency
According to the Saudi Press Agency, Saudi Arabia has halted the development of any further trade or investment with Canada, allegedly after Canada formally weighed in on Saudi Arabia's human rights record.
The EU will break its own rules if it doesn't bend on Brexit - The Telegraph
According to reporting by The UK Telegraph, EU leaders in Brussels run the risk of violating its own laws if it refuses to make any compromises in Brexit negotiations, as warned by ministers involved in the trade negotiations.
White House hasn't ruled out Canadian auto tariffs - CNBC
As reported by CNBC, The US Presidential administration is keeping potential auto tariffs in play while continuing trade negotiations with Canada.
PBOC reintroduces FX forwards reserve ratio to halt rapid Yuan depreciation
The People's Bank of China (PBOC) will set a reserve requirement ratio of 20 percent for the financial institutions settling foreign exchange forward yuan positions, according to Reuters News.
China’s state media reported statements on the ongoing US-China trade dispute last hour, in a response to Trump’s series of tweets on Saturday.
New Zealand’s Treasury: ‘Risks to our growth forecasts are rising’
New Zealand Treasury is out with its Monthly Economic Indicators for the month of July, with the key headlines found below.
Iran to ease currency rules to buoy Rial ahead of sanctions - Reuters
The Iranian state TV reported on Sunday, Iran seeks to ease the foreign exchange rules in an effort to stall the meltdown in the Rial currency amid looming US sanctions on Iran.
Key Focus ahead
We have a quiet start to a relatively light week ahead, with the German factory orders dropping in the pre-European open. In absence of first-tier macro news, traders will take incentives from the Eurozone Sentix Investor Confidence data for August, which will arrive at 0830 GMT.
The NA session is data-empty, with light trading expected amid a holiday in Canada. Most Canadian banks will be closed in observance of Civic Day. Hence, attention shifts towards tomorrow’s Reserve Bank of Australia (RBA) interest rate decision due at 0430 GMT.
EUR/USD: Focus on Italy-German bond yield differential
The EUR/USD is on the defensive, having witnessed a pennant breakdown on Thursday and the fears of Italian fiscal crisis may accentuate the negative technical setup.
GBP/USD trying to hang onto the 1.30 level ahead of a quiet Monday
Monday sees little meaningful data on the economic calendar, and the only notable event slated for today for the GBP/USD is the UK's y/y BRC Like-For-Like Retail Sales for July will be clocking in later in the day at 23:01 GMT.
Gold Technical Analysis: Yellow metal is charting a head-and-shoulders bullish reversal pattern
The hourly chart shows the safe haven yellow metal is creating a right shoulder of the inverse head-and-shoulders pattern with the neckline hurdle of $1,220.
US State Secretary Pompeo: White House to detail Iran sanctions Monday - Reuters
As reported by Reuters, The US' Secretary of State Mike Pompeo announced that the White House is set to give details on the reimposition of stiff trade sanctions on Iran after President Trump pulled the US out of the Iran accord this year.
RBA universally expected to again leave the cash rate unchanged at 1.5% - NAB
In the view of the analysts at National Australia Bank (NAB), the Reserve Bank of Australia (RBA) is likely to keep the Official Cash Rate (OCR) on hold when it meets at its policy meeting on Tuesday.
The week ahead: key events, watching US core CPI in July/trade tensions - Nomura
Analysts at Nomura offered a detailed preview of some of the key events to come this week.
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