Forex today in Asia was a quiet affair on the final trading day of this week, with most majors sticking to tight trading ranges, as markets took a breather after yesterday’s busy and volatile session. The US dollar continued to trade on the back foot across its main competitors, as the US CPI miss still weighed. Hence, the Yen bulls breathed a sigh of relief and recovered some ground, having sent the USD/JPY pair back below the 112 handle. The Kiwi was the strongest in Asia amid risk-friendly market environment and higher oil prices. On the other hand, the Aussie traded modestly flat below 0.7200, the upside was capped by mixed Chinese data releases, which showed that the fixed asset investment growth hit a new record low in the month of August. Meanwhile, the EUR and pound traded better bid heading into the early European trading.
Main topics in Asia
Japan’s Motegi: A date is yet to be set for trade talks with the US
China August data dump: Retail sales rise to 9.0%, industrial output a tad firmer at 6.1%
Japan PM Abe: Don't think Japan should maintain ultra-easy policy forever
China NBS: Slowing trend in investment to halt in coming months, more stimulus on cards?
China's crude oil output rose for the first time since October 2015
China’s Wang: World trade system not perfect, needs reform - Reuters
SNB’s Jordan: Looking forward to others tightening monetary policy
Key Focus ahead
Friday sees a light EUR economic calendar, as the Eurozone trade balance remains the only data that will drop in at 0900 GMT. The UK docket remains data empty, however, the main focus will remain on the BOE Governor Carney’s speech due at 1000 GMT. Markets will look forward to some fresh hints on the BOE’s rate hike outlook from Carney after the central bank left interest rates unchanged a day before.
Moving on, a fresh batch of US macro news will offer fresh impetus to the traders in the NA session, with the key event risk likely to be the retail sales report due at 1230 GMT. Also, the US industrial figures and prelim UoM consumer sentiment data will keep the traders busy. FOMC member Evans’ speech and BOC review are due on the cards in the American mid-morning ahead of Baker Hughes US oil rigs count data.
EUR/USD rally contradicts the uptick in two-year US-DE yield spread, focus on US retail sales
The pair could continue to defy the USD-positive yield spread if the risk assets remain well bid and more importantly, the US August retail sales figure prints below estimates.
GBP/USD: Bulls regain poise, eyes 1.3150 ahead of Carney’s speech
The GBP/USD pair is looking to break the bullish consolidative mode to the upside and reach fresh six-week highs beyond the 1.31 handle, as the focus now shifts towards the BOE Governor Carney’s speech due later in the European session.
Key US data previews: eyes on retail sales and IP- Nomura
Analysts at Nomura offered a preview of the last key data for the US economy for this week.
US Retail Sales preview: falling consumer confidence hints a poor outcome
US August Retail Sales are scheduled to be out this Friday, and once again are forecasted to have grown solidly. Sales increased in July by 0.5% as households boosted purchases of motor vehicles and clothing, although May's reading was downwardly revised to -0.1%.
How to trade the US Retail Sales Control Group with EUR/USD
US Retail Sales and especially the Control Group gauge shake the US Dollar. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
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