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Forex Today: RBNZ’s Orr powers Kiwi, focus on UK politics, US data

Dhwani Mehta FXStreet

The market mood somewhat soured in Thursday’s Asian trading, as the US President Trump’s impeachment bid strengthened and outweighed the US-China trade optimism seen overnight. Therefore, the US dollar witnessed fresh selling across its main competitors in sync with the drop in Treasury yields and US equity futures. Also, the Asian stock markets ex-Japan declined amid political woes and offered some support to the safe-haven gold. Japanese equities were buoyed by the US-Japan trade deal news.

Amongst the G10 currencies, the Kiwi outperformed and regained the 0.63 handle following the Reserve Bank of New Zealand (RBNZ) Governor Orr’s upbeat comments on the economy and monetary policy. The Aussie’s downside was capped by broad USD weakness, as it held marginal gains above 0.6750 levels. The Yen recovered some ground vs. the greenback, as USD/JPY slipped to 107.60 following the overnight surge to near 107.80. The USD/CAD pair also witnessed some losses near 1.3250 amid stabilizing oil prices.

Meanwhile, the EUR/USD pair recovered above 1.0950, but the bias still remains to the downside. The Cable held onto the recovery gains above 1.2350 ahead of the House of Commons session.

Main Topics in Asia

US-China trade updates

US sanctions Chinese firms for allegedly shipping Iranian Oil – WSJ

Senior WH Official: China is "absolutely committed" to cooperating with US on illicit fentanyl curbs

Other key headlines

US President Trump bars senior Iranian and Venezuelan officials/families from entering US

UK PM Johnson: Will not seek an extension to Brexit, even if the conditions of the Benn Bill are met

UK House of Commons Leader Rees-Mogg announces Thursday’s Parliament business

Fed's Kaplan: Feels the US can skate thorough a fragile period of global growth

A majority of the US House now backs impeachment proceedings against Trump - Politico

BOJ trims purchases of 5-10-year JGBs by JPY 30 billion

Japan’s Sugawara: Will firmly negotiate and get results about scrapping US tariffs on Japanese autos

China's 7-day repo rate hits two-month low

RBNZ’s Orr: Unlikely to need ‘unconventional’ monetary policy tools, Kiwi jumps

Key Focus Ahead

The data-dry week for the EUR calendar continues this Thursday, as political and trade headlines dominate and fill in for the absence of the first-tier macro news. However, the German Gfk Consumer Confidence, Eurozone credit growth data and the European Central Bank (ECB) monthly Economic Bulletin will offer some trading incentives. Meanwhile, the UK docket remains data-empty and therefore, the House of Common’s session will be closely eyed amid growing UK political uncertainty.

Later in the NA session, the focus will remain on the US Q2 Final GDP revision, Goods Trade Balance and weekly Jobless Claims, with all dropping in at 1230 GMT. Also, of note remains the speeches by the ECB President Draghi, BOE Governor Carney and Fed official Clarida due later in the American mid-morning.

Further, the geopolitical and trade developments will continue to have significant impact on the market mood.

EUR/USD: On the defensive amid uptick in US yields, eyes Draghi's speech

EUR/USD is operating on slippery grounds, having printed a weakest daily close in over two years on Wednesday, and could drop below 1.09 if the ECB President Draghi defends his recent decision to restart the bond-buying program.

GBP/USD: Well bid ahead of UK’s House of Commons, Carney’s Speech

GBP/USD bounces off 21-day SMA after first-day of the UK’s Parliament showdown. The House leader Jacob Rees-Mogg indicated “an exciting announcement” for Thursday. The UK MPs will progress towards no-confidence motion.

US Second Quarter Final GDP Revision Preview: The consumer is cued

Annualized GDP is the second quarter predicted to be unchanged at 2.0%. Consumer spending driving US growth. Business investment curtailed by trade concerns.

A note on American Presidential impeachment

President Trump has not been impeached. The House has not begun an impeachment inquiry though Speaker Pelosi has announced that is the intention of the Democratic caucus.

GMT	Event	Actual	Consensus	Previous
Wednesday, Sep 25
14:00	USD New Home Sales (MoM)	0.713M	0.660M	0.666M Revised from 0.635M
14:00	USD New Home Sales Change (MoM)	7.1%	3.5%	-8.6% Revised from -12.8%
14:00	USD Fed's Brainard speech
14:00	EUR ECB's Cœuré speech
14:30	USD EIA Crude Oil Stocks Change	2.412M	-0.249M	1.058M
17:00	USD 5-Year Note Auction	1.600%		1.365%
19:00	ARS Trade Balance (MoM)	$1,168M		$951M
21:00	KRW Consumer Sentiment Index	96.9	90.0	92.5
Thursday, Sep 26
05:00	SGD Industrial Production (MoM)	-7.5%	0.1%	3.6%
05:00	SGD Industrial Production (YoY)	-8.0%	-0.7%	-0.1% Revised from -0.4%
06:00	EUR Gfk Consumer Confidence Survey		9.7	9.7
06:00	DKK Retail Sales (YoY)			2.4%
07:00	SEK Consumer Confidence (MoM)		94.2	94.0
07:30	SEK Producer Price Index (YoY)			2%
07:30	SEK Producer Price Index (MoM)			0.3%
07:30	SEK Trade Balance (MoM)			6.7B
08:00	EUR Purchasing Manager Index			47.9
08:00	PHP BSP Interest rate decision		4.00	4.25
08:00	EUR Private Loans (YoY)		3.4%	3.4%
08:00	EUR M3 Money Supply (3m)			4.8%
08:00	EUR M3 Money Supply (YoY)		5.1%	5.2%
08:00	EUR Economic Bulletin
09:30	ZAR Producer Price Index (YoY)		5.4%	4.9%
09:30	ZAR Producer Price Index (MoM)		0.2%	-0.2%
12:30	USD Initial Jobless Claims		212K	208K
12:30	USD Initial Jobless Claims 4-week average			212.25K
12:30	USD Continuing Jobless Claims		1.665M	1.661M
12:30	USD Gross Domestic Product Price Index		2.4%	2.5%
12:30	USD Gross Domestic Product Annualized		2%	2%
12:30	USD Wholesale Inventories		0.3%	0.2%
12:30	USD Goods Trade Balance		$-77.327B	$-72.340B
12:30	USD Personal Consumption Expenditures Prices (QoQ)		2.3%	2.3%
12:30	USD Core Personal Consumption Expenditures (QoQ)		1.7%	1.7%
13:00	RUB Central Bank Reserves $			$531.2B
13:30	EUR ECB's President Draghi speech
14:00	USD Pending Home Sales (YoY)		-1.9%	-0.3%
14:00	USD Pending Home Sales (MoM)		0.9%	-2.5%
14:00	USD Fed's Bullard speech
14:30	USD EIA Natural Gas Storage Change		78B	84B
15:00	USD Kansas Fed Manufacturing Activity		-3.9	-2.0
15:30	USD 4-Week Bill Auction			1.95%
15:45	USD Fed's Clarida speech
17:00	USD 7-Year Note Auction			1.489%
17:00	EGP CBE Interest Rate Decision		13.25%	14.25%
18:00	MXN Central Bank Interest Rate		8.25%	8.00%
23:01	GBP GfK Consumer Confidence		-14	-14
23:01	EUR Consumer Confidence			77.2
23:30	JPY Tokyo CPI ex Food, Energy (YoY)		0.7%	0.7%
23:30	JPY Tokyo Consumer Price Index (YoY)		0.8%	0.6%
23:30	JPY Tokyo CPI ex Fresh Food (YoY)		0.5%	0.7%
23:50	JPY Foreign Bond Investment			¥476B
23:50	JPY Foreign Investment in Japan Stocks			¥-971.9B
Friday, Sep 27
05:00	EUR Consumer Confidence			-4.5
05:00	EUR Industrial Confidence			-2
06:00	EUR Import Price Index (YoY)		-2.6%	-2.1%
06:00	EUR Import Price Index (MoM)		-0.3%	-0.2%
06:00	DKK Industrial Outlook			-5
06:00	NOK Credit Indicator		5.5%	5.6%
06:45	EUR Producer Prices (MoM)		0.1%	0.4%
06:45	EUR Consumer Price Index (EU norm) (MoM)		0.1%	0.5%
06:45	EUR Consumer Price Index (EU norm) (YoY)		1.3%	1.3%
06:45	EUR Consumer Spending (MoM)		0.3%	0.4%
07:00	TRY Economic Confidence Index			87.1
07:00	EUR Retail Sales (YoY)		2.8%	3.2%
07:00	GBP BoE's Saunders speech
07:00	HUF Unemployment Rate (3M)			3.4%
07:15	EUR ECB's De Guindos speech
07:30	SEK Retail Sales (MoM)		0.2%	0.4%
07:30	SEK Retail Sales (YoY)		3.0%	4.3%
08:00	EUR Consumer Confidence		112.6	111.9
08:00	EUR Business Confidence		100.0	99.7
08:00	NOK Registered Unemployment s.a		76.73K	77.15K
08:00	NOK Registered Unemployment n.s.a		2.2%	2.3%
09:00	EUR Producer Price Index (YoY)		-1.0%	-0.5%
09:00	EUR Producer Price Index (MoM)		0%	0%
09:00	ISK Consumer Price Index (YoY)			3.2%
09:00	ISK Consumer Price Index (MoM)			0.3%
09:00	EUR Services Sentiment		9.3	9.3
09:00	EUR Consumer Confidence		-7.0	-6.5
09:00	EUR Industrial Confidence		-6.0	-5.9
09:00	EUR Business Climate		0.11	0.11
09:00	EUR Economic Sentiment Indicator		103.0	103.1
09:10	EUR German Buba President Weidmann speech
10:00	EUR Retail Sales (YoY)			-4.4%
10:00	EUR Retail Sales (MoM)			-4.3%
11:00	MXN Trade Balance s/a, $		$-0.145B	$0.653B
11:00	MXN Trade Balance, $		$1.304B	$-1.117B
11:00	EUR Consumer Price Index (YoY)			1.26%
11:00	EUR Consumer Price Index (MoM)			0.02%
11:30	INR Bank Loan Growth			10.2%
11:30	INR FX Reserves, USD			$428.96B
12:00	BRL Unemployment Rate		11.5%	11.8%
12:30	USD Fed's Quarles speech
12:30	USD Personal Income (MoM)		0.4%	0.1%
12:30	USD Personal Consumption Expenditures - Price Index (YoY)		1.3%	1.4%
12:30	USD Core Personal Consumption Expenditure - Price Index (MoM)		0.2%	0.2%
12:30	USD Personal Consumption Expenditures - Price Index (MoM)		0.2%	0.2%
12:30	USD Personal Spending		0.3%	0.6%
12:30	USD Core Personal Consumption Expenditure - Price Index (YoY)		1.6%	1.6%
12:30	USD Durable Goods Orders		-3.1%	2.0% Revised from 2.1%
12:30	USD Nondefense Capital Goods Orders ex Aircraft		1.0%	0.2% Revised from 0.4%
12:30	USD Durable Goods Orders ex Transportation		0.1%	-0.4%
12:30	USD Durable Goods Orders ex Defense		0.1%	1.3% Revised from 1.4%
14:00	USD Michigan Consumer Sentiment Index		92	92
17:00	USD Baker Hughes US Oil Rig Count			719
19:30	USD CFTC USD NC Net Positions			$-11.7K
19:30	USD CFTC Oil NC Net Positions			427.1K
19:30	USD CFTC Gold NC Net Positions			$282.6K
19:30	GBP CFTC GBP NC Net Positions			£-86.1K
19:30	JPY CFTC JPY NC Net Positions			¥23.9K
19:30	EUR CFTC EUR NC Net Positions			€-68.6K
19:30	AUD CFTC AUD NC Net Positions			$-40.1K
20:00	COP Interest rate		4.25%
Saturday, Sep 28
24h	CZK St Wenceslas Day

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.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.