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
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