The British pound continued its blood bath in Asia this Tuesday, as mounting hard Brexit risks remain the sole driver that knocked-off the GBP/USD pair to the lowest levels in 28-months ahead of the 1.21 handle. Meanwhile, the US dollar benefited across the board from the Cable sell-off and a likely hawkish Fed rate cut, keeping most majors on the back foot.
Among the G10 currencies, the USD/JPY pair enjoyed good two-way businesses, initially having tested the 109 handle on firmer Asian equities and disappointing Japanese industrial figures. However, the bears fought back charge and downed the spot back towards the 108.50 levels on Bank of Japan’s (BOJ) status-quo. The AUD/USD pair hit fresh six-week lows below the 0.69 handle on poor Australian building permits data before consolidating near the 0.69 handle. The Kiwi also tracked the Aussie price-action, as it kept the lower ground near 0.6630 region. Meanwhile, EUR/USD pair consolidated its overnight bounce below the midpoint of the 1.11 handle, as Treasury yields inched higher.
Among the commodities, the safe-haven gold held onto the recent gains near 1425 levels, while, both crude benchmarks traded on the front foot ahead of the US-China trade talks and weekly US crude stocks data.
Main Topics in Asia
Chinese exporters see endless trade war as orders drop – FT
Mexican Finance Minister Herrera: Will announce measures to boost the economy
US Senate fails to override Trump veto of bill stopping Saudi weapons sales – Reuters
Gold remains on a back foot around $1425 amid mixed market sentiment
WTI: Eeking out gains onto the $57 handle
US firms see little clarity on Huawei as US-China talks resume - Reuters
S. Korea ForeignMin: Japan likely to pass bill striking S. Korea off export whitelist – Yonhap
Scotland’s Sturgeon: UK PM Johnson is pursuing a no-deal Brexit, extremely dangerous for Scotland
BOJ leaves policy unadjusted, as widely expected, JPY keeps highs
BOJ: Won't hesitate to take extra action if needed
BOJ: Japan's economy sustaining momentum for hitting 2% inflation, but momentum lacking strength
Key Focus Ahead
Today’s EUR calendar remains a busy one, with the German Gfk Consumer Climate kicking-off the session at 0600 GMT, followed by a slew of Confidence and Sentiment indicators due out from the Eurozone at 0900 GMT. The key event risk for the shared currency remains the German Prelim CPI data, dropping in at 1200 GMT. Also, in focus remains the BOJ post-monetary policy press conference that will be addressed by the Japanese central bank Chief Kuroda.
In the NA session, a fresh batch of US economic data will dominate, including Personal Spending, Core PCE Price Index, Conference Board Consumer Confidence and Pending Home Sales among other minority reports. However, the main focus is likely to be on the resumption of the US-China trade talks in Shanghai. Meanwhile, the Federal Open Market Committee (FOMC) will start its 2-day monetary policy meeting later today, with the key announcement due on Wednesday.
EUR/USD: Upside still capped by 1.1150 ahead of German/ Eurozone data
The EUR/USD pair looks to extend its Asian consolidative mode below the 1.1150 barrier into the European session, as the focus now shifts towards the German and Eurozone macro news for the next push.
GBP/USD: Bears eye 1.2100 amid Brexit gloom
With a heavy rush of signals increasing the odds of a no-deal Brexit, the GBP/USD pair declines to fresh 28-month low as it trades near 1.2160 ahead of the London open on Tuesday.
UK Prepares for No Deal: Attorney General Says Early Elections Can't Stop Brexit
Another Remainer hope got tossed on the rocks of reality today. There's only one long-shot left. The British government has stepped up no-deal preparations - with a cabinet war room, an advertising blitz, and a fiscal offensive.
US Conference Board Consumer Confidence Preview: Happiness is relative or are your relatives happy?
Confidence expected to rise into the third quarter. Labor market, wages and low unemployment boost confidence. Trade, global slowdown not affecting sentiment.
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