Forex Today: sees risk-recovery in Asia, UK earnings in spotlight

Dhwani Mehta FXStreet

Forex today witnessed a recovery in risk appetite, despite looming US-China trade concerns, as the renewed optimism on the Brexit deal and NAFTA lifted market sentiment. As a result, the safe-haven Yen was broadly sold-off, driving the USD/JPY pair closer towards 111.50 barrier while the Antipodeans attempted a tepid recovery, as the Aussie shrugged off a dip in the Australian NAB business confidence gauge. Moreover, the commodity-currencies also derived support from positive commodities’ prices and a risk-on rally seen in the Asian equity markets.

Meanwhile, the pound consolidated the overnight gains just under the 1.3050 level while the common currency wavered around the 1.16 handle. The Canadian dollar also traded firmer near 1.3150 versus its American counterpart amid ongoing NAFTA talks.

Main topics in Asia

US mulls China sanctions over Muslim abuses - The New York Times

North Korea's Kim looking for fresh Trump meeting - Reuters

Brexit could cost London billions - The UK Times

Fitch ratings affirm Singapore at 'AAA', outlook Stable

Japan’s Motegi: Japan, US have some differences in views on trade, but will try to resolve

Russia’s Novak: OPEC and allies can keep output quotas in place even after 2018

Asian stocks see gains, emerging markets remain shaky

BoJ seen willing to raise its ETF target if buying jumps a lot - Bloomberg

FT report: Tory Eurosceptics fail to agree on Brexit plan B

Key Focus ahead

Heading into Europe, markets eagerly await the release of the UK labor market report at 0830 GMT, as the Kingdom’s wage growth numbers remain the main focus, which is expected to inch higher to 2.8% in July versus 2.7% booked in June. Also, of relevance remains the German ZEW economic surveys that will be reported at 0900 GMT alongside the Eurozone ZEW surveys and employment data.

The NA session appears data-light, with the second-liner Canadian housing starts and the US JOLTS job openings due on the cards at 1215 GMT and 1400 GMT respectively. Meanwhile, markets will continue to take cues from the Brexit and trade-related developments for some trading impetus.

EUR/USD: 20-day MA support intact despite solid USD wage growth figure, eyes ZEW survey

The EUR looks set to gain altitude in the near-term. The rally could gather pace if the German ZEW survey indices, due for release at 09:00 GMT, beats estimates and ...

GBP/USD looking to firm up over 1.30 ahead of UK earnings

Pound bulls have been seizing on the good news and pumping up the GBP on Brexit hopes for the second time in two weeks, and Tuesday sees another iteration of the UK's q/y Average Earnings at 08:30 GMT.

Week ahead: volatility should remain elevated

It is going to be a busy week in the markets, particularly for the pound with the upcoming release of key UK economic data, BoE’s rate decision and perhaps more importantly Brexit-related headlines.

BOE to reiterate its "gradual and limited" rhetoric this Thursday - Barclays

Analysts at Barclays offer a sneak peek at what to expect from the Bank of England (BOE) monetary policy meeting due later on Thursday.

GMT	Event	Consensus	Previous
Friday, Sep 07
24h	EUR Eurogroup meeting
Tuesday, Sep 11
06:00	JPY Machine Tool Orders (YoY)		13%
08:30	GBP Claimant Count Rate		2.5%
08:30	GBP Claimant Count Change	3.6K	6.2K
08:30	GBP ILO Unemployment Rate (3M)	4%	4%
08:30	GBP Average Earnings including Bonus (3Mo/Yr)	2.5%	2.4%
08:30	GBP Average Earnings excluding Bonus (3Mo/Yr)	2.8%	2.7%
09:00	EUR ZEW Survey - Economic Sentiment	-14.1	-13.7
09:00	EUR ZEW Survey - Current Situation	72.0	72.6
09:00	EUR ZEW Survey - Economic Sentiment	-10.9	-11.1
09:00	EUR Employment Change (YoY)	1.4%	1.4%
09:00	EUR Employment Change (QoQ)	0.4%	0.4%
n/a	GBP 30-y Bond Auction		1.94%
10:00	USD NFIB Business Optimism Index	108.2	107.9
12:15	CAD Housing Starts s.a (YoY)	210.0K	206.3K
12:55	USD Redbook index (YoY)		6.5%
12:55	USD Redbook index (MoM)		0.8%
14:00	USD JOLTS Job Openings	6.680M	6.662M
14:00	USD Wholesale Inventories	0.7%	0.7%
15:30	USD 52-Week Bill auction		2.365%
15:30	USD 4-Week Bill Auction		1.97%
17:00	USD 3-Year Note Auction		2.765%
20:30	USD API Weekly Crude Oil Stock		-1.2M
23:50	JPY BSI Large Manufacturing (QoQ)	8.0	-3.2
Wednesday, Sep 12
00:30	AUD Westpac Consumer Confidence		-2.3%
02:00	CNY M2 Money Supply (YoY)	8.5%	8.5%

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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