Forex Today: Kiwi – weakest in Asia, a light session ahead
The rally in Treasury yields extended into Asia this Friday, which pushed the US dollar to an eleven-day higher versus its main competitors. Subsequently, the USD/JPY pair rallied and headed for a test of the key 107.78 resistance zone, up +0.30% so far, also as the Yen remained on the back foot amid softer Japanese CPI figures.
The Antipodeans also suffered from broad-based USD strength, as the yield differential favored the buck amid upbeat US fundamentals and further Fed rate hike prospects this year. The Kiwi emerged the biggest loser, as deteriorating risk sentiment also added to the weight on the higher-yielding currency.
Meanwhile, oil prices turned negative while gold futures moved further away from the $ 1350 mark, as global trade and geopolitical tensions eased.
Main topics in Asia 1123043091
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Dollar index hit 11-day high in Asia as treasury yields rise
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Key Focus ahead
Markets head towards a quiet EU calendar this Friday, with nothing relevant up on sleeves from the Euroland and UK docket while central bankers’ speeches will continue to provide some trading impetus. The Bank of England (BOE) MPC member is due to speak at 0930 GMT, followed by the European Central Bank (ECB) Governing Council member Weidmann’s speech at 11.30GMT.
The International Monetary Fund (IMF) three-day meeting commences today, with all eyes on the headlines on the trade issue and global growth forecasts.
Moving on, the US traders will remain at the mercy of the sentiment on the Wall Street and price-action around Treasury yields and US dollar amid a lack of fundamental news from the US docket. Meanwhile, Canada sees the releases of the retail sales and inflation data, followed by the second-tier Eurozone consumer confidence data.
Besides, the speech by the FOMC member Williams will remain in focus, which will wrap up a fairly quiet final trading day of the week.
EUR/USD: Bull Pennant vs Bearish yield spread
The currency pair will likely remain rangebound today as the data calendar is light. The breakout (bearish/bullish) could happen next week if the ECB signals a significant change in the monetary policy.
GBP/USD looking down the barrel at 1.40 as soft data weighs
The week is almost over and the pair can breathe a sigh of relief, with little else on the economic calendar outside of a speech from BoE MPC Member Michael Saunders at 09:30 GMT, who will be speaking at the University of Strathclyde.
US stock market had its first loss of the week as technology companies and consumer products went south.
Gold: Bull breakout remains elusive as Treasury yields spike
Gold (XAU/USD) faded spike to $1,354 yesterday as the rise in the treasury yields put a bid under the US dollar.
Aso-Mnuchin talks to be based on focus on multilateral framework: Japan MOF - Reuters
Aso and Mnuchin are scheduled to meet for bilateral talks on Friday on the sidelines of the G20 finance leaders' gathering.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
