Forex Today: Risk-off at full steam in Asia on US political uncertainties, UK Jobs eyed

Dhwani Mehta FXStreet

Forex today was driven by risk-off moods, fuelled by rising uncertainties surrounding Trump’s President, which boosted the demand for safe-havens such as the yen, CHF, gold etc., at the expense of the Asian equities, oil prices and treasury yields.

Most of the market analysts are attributing the prevalent risk-off sentiment to a story in the New York Times (NYT), after it revealed that the US President Trump disclosed classified information to the Russian diplomats. Further, risk-aversion intensified on the latest news from the NYT released earlier today, citing that the US President Donald Trump asked then-FBI Director James Comey in February to drop the investigation into former national security adviser Michael Flynn.

The US dollar was broadly sold-off into the US political disarray and increased doubts over Trump’s ability to deliver on his campaign promises of pushing reforms and stimulus programs, in a bid to make “America great again.”

Focus now shifts towards the fundamentals due on the cards today, with the UK employment data and Eurozone final CPI awaited from the EUR calendar, while the US docket remains data-empty, except for the US EIA crude inventories data. From Canada, we have the manufacturing sales data, which will provide some incentives to the North American traders.

Main topics in Asia

U.S. President Trump requested Comey in February to drop the investigation into Flynn - NYT

According to The New York Times, U.S. President Donald Trump asked then-FBI Director James Comey in February to drop the investigation into Michael Flynn.

House oversight committee chair demands Comey memo by May 24

Chairman of the House Oversight Committee Representative Jason Chaffetz has sent a letter to the FBI asking for all memoranda, notes, and recordings relating to communications between Comey and Trump by May 24.

Gold jumps to two-week high as S&P 500 futures slip on political uncertainty

The Comey memo is shaking things up this Wednesday morning in Asia. The S&P 500 futures dropped 14 points or 0.62%, while the safe haven gold clocked a two-week high of $1245.02 levels.

Australia’s wage price index held steady at 0.5% in Q1, meets expectations

The Australian wage price index remained unchanged at 0.5% in Q1, same as that booked in Q4, leaving the annual growth rate steady at 1.9% seen in Q4 and Q3 that were the slowest since the great recession.

Key Focus ahead

GBP/USD: Will it conquer 1.30 handle on an uptick in UK wages?

The bulls regain poise in mid-Asia, prompting a fresh buying-wave in the GBP/USDpair, in a bid to regain 1.2950 barrier amid persisting broad based US dollar weakness and risk-off market profile.

EUR/USD - ‘Relative political stability in the Eurozone’ supports further gains

EUR/USD extended the three-day winning streak in Asia to a high of 1.1115; its highest level since November 9.

What are the key event risks coming up? - Westpac

Analysts at Westpac offered the key event risks coming up

GMT	Event	Consensus	Previous
Wednesday, May 17
07:00	EUR Non-monetary policy's ECB meeting
08:30	GBP Claimant Count Rate		2.2%
08:30	GBP ILO Unemployment Rate (3M)	4.7%	4.7%
08:30	GBP Claimant Count Change	7.5K	25.5K
08:30	GBP Average Earnings including Bonus (3Mo/Yr)	2.4%	2.3%
08:30	GBP Average Earnings excluding Bonus (3Mo/Yr)	2.2%	2.2%
09:00	EUR Consumer Price Index (YoY)	1.9%	1.9%
09:00	EUR Consumer Price Index - Core (MoM)		1.4%
09:00	EUR Consumer Price Index - Core (YoY)	1.2%	1.2%
09:00	EUR Consumer Price Index (MoM)	0.4%	0.8%
09:00	EUR Construction Output w.d.a (YoY)		7.1%
09:00	EUR Construction Output s.a (MoM)		6.9%
11:00	USD MBA Mortgage Applications		2.4%
12:30	CAD Manufacturing Shipments (MoM)	1.0%	-0.2%
14:30	USD EIA Crude Oil Stocks change	-2.283M	-5.247M
Thursday, May 18
04:00	USD Fed's Bullard speech
08:30	GBP Retail Sales ex-Fuel (MoM)	1.0%	-1.5%
08:30	GBP Retail Sales ex-Fuel (YoY)	2.5%	2.6%
08:30	GBP Retail Sales (MoM)	1.0%	-1.8%
08:30	GBP Retail Sales (YoY)	2.0%	1.7%
11:30	EUR ECB Monetary Policy Meeting Accounts
12:30	USD Initial Jobless Claims	240K	236K
12:30	USD Continuing Jobless Claims	1.960M	1.918M
12:30	CAD Foreign portfolio investment in Canadian securities		$38.84B
12:30	CAD Canadian portfolio investment in foreign securities		$6.33B

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.

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Gold pares intraday losses; down a little below $4,100 as focus remains on US NFP

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Canada Unemployment Rate set to hold at 6.5% as hiring recovers

Statistics Canada will release its October Labour Force Survey on Friday at 13:30 GMT, with markets anticipating a modest recovery in employment following September's sharp decline. The Unemployment Rate will also be closely watched, as the latest figures could influence the Canadian Dollar.

US Nonfarm Payrolls expected to pick up in October

The United States Bureau of Labor Statistics is set to release October Nonfarm Payrolls data on Friday at 13:30 GMT. The report is expected to show an increase of 65K jobs, up from 29K in the previous month.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.