Forex Today: Safe-havens fall amid better risk tone, focus on trade, Brexit


Lingering trade war and recession fears kept the Asian traders in limbo, as the ongoing Yuan weakness combined with higher Wall Street futures and the recovery in the US Treasury yields sent mixed signals. Safe-havens such as the Yen and Gold lost ground amid increased demand for the risk assets such as oil, equities and Treasury yields.

However, the higher-yielding currencies, the Antipodeans, failed to benefit from improved risk tones and suffered moderate losses on weak fundamentals and persistent weakness in the onshore Chinese Yuan. Meanwhile, the USD/JPY pair held onto gains but remained below the 106 handle.

Heading into Europe, the EUR/USD pair is seen trapped within the familiar range below the 1.11 handle while the Cable consolidates Tuesday’s rally below 1.23 handle, awaiting fresh political cues.  

Main Topics in Asia

Italy’s Di Maio: The new government proposal will be voted online by next week

UK FinMin Javid: Will  announce increase in public spending on schools, police and health on September 04

RBNZ Governor Orr: monetary policy remains as effective as ever - Full speech

UK shop prices registered sharpest decline in over a year in August

PBOC sets Yuan reference rate at 7.0835

US moves swiftly to implement Trump’s trade war tariff increase on Chinese goods - SCMP

Asian stocks ex-Shanghai Composite track S&P 500 futures higher

US yield curve inverts to levels last seen in 2007

Japan's move to lower S. Korea trade status takes effect - Associated Press

China-US 10-yr yield spread hits highest since December 2017

Key Focus Ahead

The dry spell continues in the European calendar this Wednesday, as Germany’s Import Price Index and Gfk Consumer Confidence Survey fill in for a sparse data. Later in the European mid-morning, the Eurozone credit growth data will be reported at 0800 GMT. The UK docket has nothing to offer, but the pound could continue to draw support from positive Brexit news.

The NA session also remains a thin-showing, with no relevant first-tier macro data due on the cards. Therefore, the speeches by the FOMC members Barkin and Daly will be closely eyed for fresh dollar trades.

Markets will continue to watch out for fresh US-China trade headlines and the US President Trump’s comments among Brexit and Italian political developments for near-term trading directives.

EUR/USD remains below 1.11 despite US curve inversion, slide in US-German yield spread

EUR/USD remains on the defensive below 1.11 ahead of the London open despite the US yield curve inversion and the slide in the US-German yield spread to the lowest level since the first quarter of 2018.

GBP/USD remains subdued ahead of Brexit talks at Brussels

UK’s political uncertainty drags the GBP/USD from the monthly top. British politicians are active to defy no-deal Brexit, expected proroguing of the Parliaments. All eyes on David Frost’s visit to Brussels.

WTI: Looks north with falling channel breakout on the daily chart

WTI oil is looking north with falling channel breakout on the daily chart. A break above $56 could be seen during the day ahead. 

GMT
Event
Vol.
Actual
Consensus
Previous
Thursday, Aug 22
24h
 
 
Friday, Aug 23
24h
 
 
Saturday, Aug 24
24h
 
 
24h
 
 
Sunday, Aug 25
24h
 
 
Monday, Aug 26
24h
 
 
Wednesday, Aug 28
n/a
 
0.0%
-1.4%
n/a
 
-1.7%
-2.0%
06:00
 
9.6
9.7
08:00
 
 
3.3%
08:00
 
4.7%
4.7%
08:00
 
4.6%
4.5%
08:00
 
 
-24
09:40
 
 
-0.41%
11:00
 
 
-0.9%
14:30
 
-2.133M
-2.732M
16:20
 
 
17:00
 
 
1.824%
21:30
 
 
23:50
 
 
¥499.7B
23:50
 
 
¥-359.6B
Thursday, Aug 29
01:00
 
 
5%
01:00
 
 
-44.3
01:30
 
 
01:30
 
0.5%
-1.7%
05:00
 
 
37.8
07:55
 
5%
5%
07:55
 
4K
1K
09:00
 
10.5
10.6
09:00
 
-7.1
-7.1
09:00
 
-7.4
-7.4

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD: Bears stepping in as US yields melt

EUR/USD is slightly firmer on the day trading around the 1.16 figure after rising from a low of 1.1548 to a score a high of 1.1626 following a drop in US yields. The 10-year yield is testing the horizontal support and has broken below the trendline.

EUR/USD News

GBP/USD: Sellers attack 50-DMA on monthly support break

GBP/USD prints a three-day downtrend following the key support break, pressured around 1.3740 during the early Asian session on Thursday. The cable pair broke an ascending support line, now resistance, from September 30 the previous day but refrained from closing below 50-DMA.

GBP/USD News

Gold bounded in familiar territory, riding dynamic support

Gold holds in a critical support structure on the daily chart. XAU/USD leans with a bullish bias with eyes on a break of $1,830. Lower US yields are supporting the bullish bias and are weighing on the greenback.

Gold News

MATIC outperforms Bitcoin and Ethereum, Polygon targets $3 and new all-time highs

MATIC price action has been in a bullish tear, trading to the inverse of nearly every other cryptocurrency. Consequently, it was positioned perfectly for a rally and is now on track to create a new all-time highest weekly close. A new all-time highest weekly close is on the horizon.

Read more

BOJ Preview: Focus on outlook tweaks ahead of general election Premium

Despite the recent depreciation in the yen and rising energy prices, the Bank of Japan (BOJ) is likely to maintain its monetary policy settings on Thursday, as it concludes its two-day monetary policy review meeting.

Read more

Forex MAJORS

Cryptocurrencies

Signatures