The US dollar and the Kiwi replicated the moves seen in Asia a day before, as risk-on sentiment remained the key underlying theme amid upbeat US earnings and firmer equities.
In absence of fresh fundamental drivers this session, the fx today was driven by the USD price-action, with the pound taking a back seat ahead of the key Brexit Summit and UK CPI report. The USD/JPY pair extended gains but remained capped by 112.50 level while the Aussie faced rejection once again near 0.7150. The Kiwi was the top performer while both the EUR and CAD emerged the laggards.
Among the commodities space, both crude benchmarks traded flat while gold prices on Comex dropped below USD 1225 amid a better risk environment.
Main topics in Asia
RBA Debelle: wages may not increase until unemployment falls further
US Trump: Saudi prince denies knowledge of journalist slaying - Reuters
UK trade minister to deny that the UK will lower food standards post-Brexit - Reuters
UK trade minister to deny that the UK will lower food standards post-Brexit - Reuters
Trump: A good relationship with Russia is better than bad one – Fox News
Asian stocks see gains as investors shrug off market fears, Nikkei 225 extends bounce
Key Focus ahead
We have busy session ahead, with the two-day crucial European Union Summit on the Brexit deal likely to kick-off later today. The market sentiment will be driven by the Brexit-related developments while the UK inflation figures could also offer some trading impetus to the GBP markets. The UK consumer prices are likely to accelerate to 2.8 percent y/y in September while core figures are seen softer at 1.8 percent.
Also, in focus remains the Eurozone final CPI data due on the cards at 0900 GMT alongside the release of the construction output. The US docket also remains quite eventful, with the US housing starts and building permits data slated for release at 1230 GMT ahead of the speeches by the ECB Vice-President Weidmann and FOMC member Brainard. The main highlight in the NA session remains the FOMC minutes due at 1800 GMT.
EUR/USD: Bears eyeing 1.1535 ahead of Eurozone CPI, Fed minutes
The bid tone around the US dollar keeps growing bigger heading into the early European trading, keeping the EUR/USD pair near the lower bound of today´s trading range below the 1.16 handle, as the immediate focus now remains on the Eurozone final CPI figures due at 0900 GMT.
GBP/USD: Buyers struggling to keep the wheels upright ahead of major EU summit, UK CPI
The overall mood in markets remains taut in the run-up to Wednesday's EU leadership summit, where Brexit will be the top billing for the day. Alongside the headline-driving EU summit that kicks off today, Britain sees September's CPI in the barrel for 08:30 GMT.
UK inflation Preview: Real wages set to increase further as inflation is seen decelerating
The UK headline inflation is expected to have accelerated to 2.5% y/y in September, from 2.4% y/y in August while core inflation stripping the consumer basket off food and energy prices is seen decelerating to 1.8% y/y …
FOMC minutes to show Fed remains constructive on the economic outlook - Barclays
The Barclays Research Team offers key highlights on what to expect from Wednesday´s FOMC minutes of the September monetary policy meeting due to be released at 1800 GMT.
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