Forex Today: Kiwi leaps as RBNZ disappoints doves; focus shifts to UK CPI


The Kiwi was the biggest mover in Asia this Wednesday, as surprisingly less dovish as expected Reserve Bank of New Zealand (RBNZ) monetary policy statement and Governor Orr’s comments lifted the NZD/USD pair more than 120-pips to reach the highest levels in six days just ahead of the 0.6850 barrier. The Aussie was boosted in tandem with its OZ peer and rallied to weekly tops near 0.7140 levels while the increased odds of the US-China trade deal also underpinned the sentiment around the Antipodeans.

Meanwhile, the Yen was undermined by the risk-on action in the Asian equities and US equity futures, having sent the USD/JPY pair to fresh seven-week tops at 110.71. However, the bulls lacked follow-through amid the extension of the US dollar correction across the board. The USD index refreshed two-day lows at 96.64, having faced rejection again above the 97 handle a day before.

On the commodities front, both crude benchmarks rallied nearly 1% amid OPEC output cuts and Venezuela sanctions while gold prices on Comex headed back to the 1320 mark on broad USD retreat. 

Main Topics in Asia

RBNZ Monetary Policy event

RBNZ keeps rates on-hold, no signals on its next moves´

RBNZ’s Orr: Chance of a rate cut has not increased

RBNZ’s Orr: Exchange rate has been "remarkably well behaved in recent times"

Other News

Australia: Consumer sentiment lifts - Westpac

Fed’s Mester: Getting close to neutral interest rate

Fed's George: Backed rate hike pause to assess impact

US Treasury Sec Mnuchin: Hopes for the productive US-China trade meetings

Trump: `Regardless of wall money,' wall is being built

Moody's official: Opportune time for Japan to hike sales tax - Reuters

EU-UK Free trade agreement is most likely eventual outcome of Brexit – Reuters poll

Sources: Spanish PM to announce snap election soon after budget vote - Reuters

Sources: China's President Xi to meet top US trade negotiators on Friday - SCMP

Oil remains bid in Asia on Venezuela sanctions and OPEC output cut

Key Focus Ahead

Wednesday’s EUR macro calendar remains relatively busy, with a host of fresh relevant updates from the UK economy at 0930 GMT, including the UK CPI, PPI and retail price index. Next of note is expected to be the Eurozone industrial production data for the month of December, slated for release at 1000 GMT.

In the NA session, the US January inflation report will headline, with the focus on the core figures amid weaker energy prices. The headline CPI figure is likely to ease to 1.5% y/y vs. 1.9% previous while the core rates are seen lower at 2.1% vs. 2.2% last.

Apart from the data, the speeches from the global central bankers will also hog the limelight in the day ahead.

1215 GMT: FOMC member Bostic

1350 GMT: FOMC member Mester

1910 GMT: RBNZ Governor Orr

EUR/USD: Bullish outside day needs strong follow-through, focus on risk sentiment

With equities looking to extend risk-on, the Eurozone recession fears will likely take a back set for the second day, allowing the pair to confirm bull reversal with a close above 1.1340.  That breakout, however, may remain elusive if equities turn risk-off ...

GBP/USD maintains latest recovery ahead of UK inflation

Looking forward, the January month consumer price index (CPI) for the UK will be getting the immediate attention of the Pound traders. The headline CPI YoY is expected to take a step back to 1.9% from the 2.1% registered during the December last-year.

UK headline CPI to ease to 2% on lower energy inflation - Citi

Analysts at Citi group offer a sneak peek at what to expect from Wednesday UK CPI report due on the cards at 0930 GMT.

US CPI Preview: Lower will get the Fed's attention

The Bureau of Labor Statistics, a division of the Department of Labor will publish its Consumer Price index for January on Wednesday February 13th at 8:30 am EST, 13:30 GMT.

GMT
Event
Vol.
Actual
Consensus
Previous
Thursday, Feb 07
24h
 
 
Friday, Feb 08
24h
 
 
Saturday, Feb 09
24h
 
 
Sunday, Feb 10
24h
 
 
Monday, Feb 11
24h
 
 
Tuesday, Feb 12
24h
 
 
Wednesday, Feb 13
09:30
 
2.6%
2.7%
09:30
 
-0.8%
0.4%
09:30
 
3.8%
3.7%
09:30
 
0.0%
-0.3%
09:30
 
0.2%
0.2%
09:30
 
2.2%
2.5%
09:30
 
2.3%
2.5%
09:30
 
0.3%
-1.0%
09:30
 
1.9%
1.9%
09:30
 
1.9%
2.1%
09:30
 
-0.7%
0.2%
10:00
 
-0.4%
-1.7%
10:00
 
-3.2%
-3.3%
n/a
 
 
0.85%
12:00
 
 
-2.5%
12:15
 
 
13:30
 
0.1%
-0.1%
13:30
 
251.52
251.23
13:30
 
 
260.03
13:30
 
2.1%
2.2%
13:30
 
1.5%
1.9%
13:30
 
0.2%
0.2%
13:50
 
 
15:30
 
 
1.263M
19:00
 
$-11B
$-205B

 

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