Forex Today: Markets cautious amid trade uncertainty; German/ Eurozone data eyed


Mixed signals on the likely US-China Phase One trade deal kept the investors on the edge in the Asian session on Wednesday. The recent reports cited a threat to the Phase One trade agreement and therefore, the risk sentiment somewhat soured, with US Treasury yields back in the red. The Wall Street futures also witnessed caution trading, as the Asian equity markets pared early gains.

Meanwhile, the US dollar retreated from multi-day tops across its main competitors, tracking the pullback in the Treasury yields. The US yields rallied hard on Tuesday following a big beat on the US ISM Non-Manufacturing PMI release and trade optimism. Most majors attempted a recovery, as the USD bulls took a breather. However, the gains were limited by receding optimism on the US-China trade deal.

The USD/JPY pair flirted with the 109-handle following a drop from near 109.20 region despite weaker Japanese Services PMI data and dovish BOJ minutes. Meanwhile, the Aussie stuck to its range below 0.6900 levels while the Kiwi briefly dropped to 0.6365 lows after New Zealand’s Unemployment Rate ticked higher in Q3 and fanned Reserve Bank of New Zealand (RBNZ) rate cut hopes. Also, the commodity currency, USD/CAD traded better bid, as the Canadian dollar was hit by the renewed selling in oil prices. Both crude benchmarks turned lower amid a big build in the US API Crude Stocks and risk-aversion. Meanwhile, the gold bulls licked their wounds below 1490 levels after the steep decline seen a day before.

Ahead of the European, both the European currencies, the EUR/USD and Cable are trading almost unchanged on the day, with the Fiber hovering around 1.1075 region while the latter trades in the familiar range below the 1.29 handle, as markets await the key German Factory data and Brexit updates.

Main Topics in Asia

US-China trade updates

Beijing has doubled down on demands that may threaten trade agreement with the US – Nikkei

Phase One China trade deal to be "possibly" signed in Iowa – Fox News

Former Chinese Vice CommerceMin: Beijing won't agree if the US does not cancel some tariffs – Global Times

Other key headlines

New Zealand Jobless Rate ticks higher to 4.2% in Q3

Nigel Farage in secret talks with Tory Eurosceptics to stand down Brexit Party candidates – The Telegraph

UK PM Spokesperson: UK PM Johnson urged US Pres. Trump to lift tariffs on goods including scotch whiskey

Fed’s Kaplan: Fed policy is currently where it needs to be

Fed’s Kashkari: US interest rates are now modestly accommodative

BOJ Minutes: Appropriate to persistently continue with easing

Japan’s services sector shrinks for first time since 2016

UK small manufacturers gloomiest since Brexit referendum - CBI

BI Survey: Indonesia's retail sales rise 0.7% y/y in September

Key Focus Ahead

The EUR macro calendar today is likely to be dominated by the Eurozone and German Services PMI readings that will drop in around 0900 GMT. Also, the ECB-speak and Eurozone Retail Sales will offer some trading incentives to the market, as all eyes remain focused on US-China trade-related developments and UK political drama heading into the December 12 general election. The UK docket remains data-empty after the release of the PMI report earlier this week.

In the NA session, the speeches by the US Federal Reserve (Fed) officials Evans and Williams will be closely eyed, in absence of relevant first-tier macro news from the US. The Canadian traders will watch out for the Ivey PMI and EIA weekly Crude Stocks data due for release at 1500 GMT and 1530 GMT respectively.

When are the German Factory Orders and how could they affect EUR/USD?

EUR/USD is already operating on slippery grounds, having charted a bearish reversal candlestick pattern over the last two days. A weaker-than-expected factory orders data will likely yield a convincing break below 1.1073, opening the doors for a deeper drop to 1.0966.

GBP/USD under pressure amid UK’s political plays, trade in focus

Despite increasing odds for the Tory leader to win the December month snap election, GBP/USD witnesses downside pressure as pessimism surrounding the US-China trade deal keeps the greenback strength intact.

DXY: U.S. dollar Index forms a potential inverted head and shoulder price pattern

The current data reveals a potential complete head and shoulder price pattern which could occur if the right shoulder is completed. This could drive the U.S. dollar down to around 97.55 before making its way back up to 97.90 and 98.40

GMT
Event
Vol.
Actual
Consensus
Previous
Sunday, Nov 03
24h
 
 
Monday, Nov 04
24h
 
 
Wednesday, Nov 06
07:00
 
-6.2%
-6.7%
07:00
 
0.1%
-0.6%
08:55
 
52.5
51.2
08:55
 
48.6
48.6
09:00
 
 
1.1%
09:00
 
 
09:00
 
51.8
51.8
09:00
 
50.2
50.2
09:30
 
 
10:00
 
0.1%
0.3%
10:00
 
2.5%
2.1%
12:00
 
 
0.6%
13:00
 
 
13:30
 
0.9%
2.3%
13:30
 
2.2%
2.6%
14:30
 
 
15:00
 
54.4
48.7
15:00
 
 
55.8
15:30
 
2.721M
5.702M
18:00
 
 
1.59%
21:30
 
 
42.6
Thursday, Nov 07
24h
 
 
00:30
 
 
0%
00:30
 
 
-3%
00:30
 
5,000M
5,926M

 

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 

EUR/USD News

GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 

GBP/USD News

Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures