Forex Today: Risk reset lifts Antipodeans, focus shifts to US GDP


Forex today breathed a sigh of relief amid a mild recovery in the risk sentiment, as reflected by the bounce in the US equity futures and Treasury yields. But the traders remained on a cautious footing amid negative Asian equities, as US-China trade woes induced global growth fears continued to linger.

Among the Asia-pac currencies, the USD/JPY pair managed to keep its recovery mode intact near 109.60 region, although the bulls lacked vigor ahead of the key US GDP release. The Antipodeans were lifted by the risk reset but remained trapped in a tight trading range. The Aussie faced stiff resistance once again at 0.6930 following downbeat Australian capex and housing data while the Kiwi flirting with the latest highs of 0.6523, unperturbed by New Zealand’s 2019 Budget that showed a downward revision to the budget surplus and growth forecast. The upbeat momentum can be also attributed to the oil-price rebound. Meanwhile, gold futures on Comex remained on the back foot around 1275 levels, in the wake of the recent USD strength.

Looking at the European currencies, the EUR/USD pair attempted a tepid bounce but remained vulnerable to test the yearly lows heading into a holiday-thinned EUR trading session. The Cable held steady near 1.2625/30 region amid Brexit uncertainty.

Main Topics in Asia

UK Foreign Minister Hunt: Would rather delay Brexit past 31st October deadline than risk general election - ITV

The U.S. is doomed to fail if its acts arbitrarily on trade - People's Daily

South Korea suspected of selling US dollars to defend Won

Fitch: Australia's growth at decade-low despite de-synchronized cycles

First quarter (Q1) Private Capital Expenditure arrives big miss (-1.7% vs 0.5%) , AUD lower

BOJ's Sakurai: Important to hit price target

China’s Vice ForeignMin Zhang: Provoking trade disputes amounts to economic terrorism

Australia increases minimum wage by 3%

New Zealand cut its budget surplus forecast for 2019/20 to NZD1.3bn, Kiwi sticks to lows

NZ FinMin Robertson: US-China trade dispute, Brexit uncertainty and slowing global economy pose continuing risks

PBOC Adviser Liu: Chinese economy still has great potential

Brent oil technical analysis: bias remains bearish, $70.56 is the level to beat for bulls

Gold: $1266/65 remains on sellers’ radar as USD strength weigh over risk aversion

Asian stocks track Wall Street losses

Key Focus Ahead

Markets are poised for a sparse EUR calendar, as most major European markets, including the German, Swiss and French, remain closed in observance of Ascension Day. Hence, traders will take some cues from the Spanish preliminary CPI figures and retail sales data due for release at 0700 GMT and 0800 GMT respectively. Meanwhile, the UK docket remains data-empty. At 0730 GMT, the speech by the BOE MPC member Ramsden will be eyed for fresh trading impetus.

In contrast, the NA session is likely to be a busy one, with a flurry of key US macro data slated for release that includes the US prelim Q1 GDP, goods trade balance, Personal Consumption Expenditure Prices dropping in at 1230 GMT. At the same time, the Canadian Q1 current account data will be reported. Next of relevance remains the US pending home sales at 1400 GMT and the US EIA weekly crude stocks data due on the cards at 1500 GMT. Besides, the speeches by the Fed Vice President Clarida and BOC policymaker Wilkins will also remain in the focus.

EUR/USD: On the back foot with three-day losing streak ahead of US GDP

EUR/USD appears on track to test the recent low of 1.1107, having dropped for a third straight day on Wednesday and may print fresh 2019 lows in the North American session if the US reports a better-than-expected first quarter GDP. 

GBP/USD: Bulls and bears jostle around latest lows amid Brexit pessimism

Even if ever increasing Brexit uncertainty continues to haunt the British Pound (GBP), oversold RSI and a ray of optimism before next week’s parliament discussion limit the GBP/USD pair’s moves around 1.2630 ahead of the London open on Thursday. 

US First Quarter GDP Revision Preview: The dollar wins

Gross domestic product is projected to decline to a 3.1% annualized rate in the first quarter after the initial release at 3.2%. Growth in the first quarter exceeded expectations by a substantial amount. 

Senior US Official: Pence, Trudeau to discuss Huawei and China trade issues in Ottawa

Reuters quoted senior US Administration officials, on conditions of anonymity, the US Vice President Pence and Canadian Prime Minister Trudeau will discuss their countries’ joint dispute with China over Huawei during a meeting in Ottawa later today.

GMT
Event
Vol.
Actual
Consensus
Previous
Monday, May 27
24h
 
 
24h
 
 
Thursday, May 30
24h
 
 
24h
 
 
07:30
 
 
12:30
 
1.662M
1.676M
12:30
 
215K
211K
12:30
 
3.1%
3.2%
12:30
 
1.7%
0.6%
12:30
 
0.2%
-0.1%
12:30
 
 
$-71.33B Revised from $-71.45B
12:30
 
0.6%
0.6%
12:30
 
1.3%
1.3%
12:30
 
-18.00B
-15.48B
14:00
 
-3.2%
-1.2%
14:00
 
0.9%
3.8%
14:30
 
 
100B
15:00
 
-0.80M
4.74M
15:30
 
 
2.335%
16:00
 
 
18:15
 
 
23:01
 
-12
-13
23:30
 
2.4%
2.5%
23:30
 
1.63
1.63
23:50
 
1.2%
1.3%
23:50
 
0.8%
0.9%
23:50
 
1.2%
1.4%
23:50
 
0.2%
-0.6%
23:50
 
-1.7%
-4.3%

 

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