Broad-based US dollar rebound was the main underlying theme in Tuesday’s Asian trading, as better risk tones sent the Treasury yields higher in tandem with the US equity futures. However, the Wall Street turmoil kept the Asian equities on the back foot while Gold prices headed towards six-year highs above $ 1520 levels. Markets continued to weigh in the Hong Kong protests and Argentinian crisis.
Amidst improved risk sentiment and broad USD comeback, the Yen, the Swiss Franc and the Euro slipped. The USD/JPY pair bounced-back towards 105.60 region while the USD/CHF extended the recovery from multi-month lows beyond the 0.97 handle. The EUR/USD pair kept the recent range play intact but failed to resist above the 1.12 handle yet again. The Cable also turned lower towards the mid-1.20s amid looking Brexit anxiety and ahead of the key UK employment data.
Meanwhile, the Antipodeans eked out moderate gains despite a weaker Yuan fix, mainly buoyed by upbeat Australian NAB survey and the rally in gold prices. Meanwhile, the Kiwi battled 0.6450 amid aggressive Reserve Bank of New Zealand (RBNZ) rate cut calls. The USD/CAD pair traded flat below the 1.3250 level despite risk-on and a pause in the oil-price rally.
Main Topics in Asia
ComRes Survey: UK PM Boris Johnson has public's support to deliver Brexit by any means – Telegraph
US Security Advisory Bolton: UK PM Johnson will look at Huawei ‘from square one’ – FT
RBA Kent: We are inflation targeters, unlikely to need negative rates in Australia
JP Morgan lowers its outlook for iron ore
Iron ore prices to rebound to $115/ton in 3 months – Goldman Sachs
Gold hits record high in Argentinian Peso terms
PBOC sets Yuan reference rate at 7.0326
WTI technical analysis: Bulls hold above 50% retracement level with eyes on 56 handle
Australia NAB business survey beats estimates for July, Aussie keeps highs
Gold technical analysis: Eyes fresh 6-year highs despite overbought conditions
Hong Kong's Lam: Hong Kong's economy deteriorating further - Bloomberg
China to review anti-dumping measures on Indian optical fiber
Key Focus Ahead
Tuesday’s EUR macro calendar is a hectic one after a data-dry Monday’s docket. Markets, therefore, gear up for the German Final Consumer Price Index (CPI) and Wholesale Price Index (WPI) releases due at 0600 GMT. Later in the European session, the UK Employment and Wage growth data will hog the limelight, dropping in at 0830 GMT, following last week’s bleak UK Q2 GDP report. An upbeat UK labor market report could offer the much-needed respite to the GBP bulls. The next in focus are the German and Eurozone August ZEW surveys, the results of which are likely to have a major impact on the shared currency.
The NA session offers the critical US CPI report for July among other minority reports ahead of the US American Petroleum Institute’s (API) Weekly Crude Oil Stock data due on the cards at 2030 GMT. Despite a data-busy day, the risk sentiment is likely to be the main market driver, in the wake of lingering US-China trade worries and UK political developments.
EUR/USD: Rangeplay continues ahead of key German data
EUR/USD remains trapped in 1.1250-1.1167 range for the fifth day. The downside has been capped near 1.1167 despite the German yield curve inversion. The EUR could take a beating if theGerman ZEW survey underlines the need for additional monetary easing by the ECB.
GBP/USD keeps buyers away ahead of UK employment, US CPI
GBP/USD fails to carry earlier recovery forward amid Brexit/political uncertainty. The US Dollar (USD) recovery on the back of the latest risk-on also favors the pullback. The UK June month jobs data and July month US CPI report eyed in addition to trade/political news.
Gold technical analysis: Eyes fresh 6-year highs despite overbought conditions
Gold looks set to hit a new six-year high above $1,520. The daily RSI is reporting overbought conditions. Prices, however, are showing signs of buyer exhaustion.
UK Jobs Preview: High wage expectations may result in a bitter disappointment – GBP/USD may suffer
The UK is expected to report a low unemployment rate and a robust increase in wages. High expectations may result in a disappointment, lowering expectations for a rate hike. GBP/USD – already struggling with Brexit – has room to fall.
US CPI Preview: Rhetoric aside who’s watching CPI?
Headline inflation expected to rise slightly, core stable. Inflation third on Fed list behind growth, trade. CPI result will not sway Fed policy.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD fluctuates near 1.0700 after US data
EUR/USD stays in a consolidation phase at around 1.0700 in the American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.