Forex Today: Softer risk tone amid mixed trade signals; a light session ahead


The overnight US-China trade optimism was watered down by the comments from the White House Adviser Navarro that curbed the risk appetite across Asia. The market mood turned sour after Navarro denied any agreement on the removal of the existing tariffs on China, with the Asian equities paring back the early gains. Treasury yields also pulled back from three-month tops while US equity futures dropped about 0.30%. The US dollar, however, remained closed to three-week highs vs. its main peers.

Amongst the G10 currencies, the Aussie was the biggest loser, weighed down by the latest trade deal doubts and dovish RBA Statement on Monetary Policy (SoMP), as markets overlooked the upbeat Chinese trade figures. AUD/USD failed several attempts above the 0.69 handle, having lost over 0.25% to hit session lows at 0.6875. The Kiwi also felt the pull of gravity, but the losses remain capped ahead of the 0.6350 level. Meanwhile, the safe-haven Yen recovered from half-yearly lows vs. the greenback but the USD/JPY bulls manage to defend the immediate support near 109.15. The USD/CAD pair, on the other hand, moved upwards towards the 1.3200 mark, mainly driven by the weakness in oil prices. Gold prices consolidated Thursday’s extensive drop around 1470 levels.

Heading into the European morning trades, both the European currencies, the EUR/USD and Cable trade almost unchanged, as they take a breather after a volatile session witnessed a day before.

Main Topics in Asia

US-China trade updates

WH Eco. Adviser Kudlow: There'll be tough concessions if there's Phase One deal

White House Spokesman: 'Very optimistic' will soon reach China deal – Fox News

White House adviser Navarro: There is no agreement at this time to remove any of the existing tariffs

Other key headlines

EU’s Juncker does not think US Pres. Trump will implement auto tariffs on EU automobiles

Japan’s Household Spending rises 9.5% YoY in Sept, fastest pace on record

Japan PM Abe to instruct ministers to compile stimulus package - NHK

RBA SoMP: Board prepared to ease policy further if needed

Fed’s Bostic: Not hearing any hints suggesting that consumer spending is slowing

Moody's lowers India's outlook to 'negative' from 'stable'

China’s Vice Premier Liu: Chinese economy is stable amid challenges

Moody's lowers India's outlook to 'negative' from 'stable'

China’s Oct trade data (CNY): Surplus – a big beat on expectations

Key Focus Ahead

The immediate focus is on the German Trade Balance and Current Account data scheduled at 0700 GMT, in the wake of easing US-China trade war impact. Ahead of the German data, the Swiss Unemployment Rate will be published, which is unlikely to have any impact on the Swissie. The UK docket remains absolutely data-empty and therefore, the sentiment around the pound will be mainly driven by the BOE aftermath.

The NA session sees the Canadian Labor Market report dropping in at 1330 GMT, followed by the US Wholesale Inventories and the key Preliminary Michigan Consumer Sentiment Index lined up for release at 1500 GMT. Meanwhile, the speech by the Fed Official Brainard will be closely heard after the hawkish comments from the Atlanta Fed President Bostic delivered in early Asia. For the oil market, the Baker Hughes US Oil Rig Count data will be next of relevance.  

The US-China trade deal-related updates will continue to play and have a strong bearing on the risk sentiment, eventually impacting the fx board.

EUR/USD defends key support, focus on US Treasury yields

EUR/USD is attempting a bounce from the 50-day average support. US 10-year yield has pulled back from three-month highs. Risk-off, if any, could bode well for the EUR. On the data front, the German trade and US Michigan Consumer Sentiment Index are due for release and could influence EUR/USD.

GBP/USD in post-BOE bearish consolidation above 1.2800

The recovery attempts in GBP/USD continue to face stiff resistance near 1.2825 region, leaving the spot in a downside consolidation phase above the 1.28 handle, as the dust settles over the dovish BOE monetary policy decision aftermath.  

US Michigan Consumer Sentiment Preview: The Beijing express arrives in the station

Sentiment to rise modestly in November continuing recovery. Labor market strength in job and wages underpinning outlook. China trade deal unlikely to have any positive effect as yet.

GMT
Event
Vol.
Actual
Consensus
Previous
Sunday, Nov 03
24h
 
 
Monday, Nov 04
24h
 
 
Thursday, Nov 07
24h
 
 
Friday, Nov 08
06:45
 
2.3%
2.3%
07:00
 
0.4%
-1.8%
07:00
 
€18.1B
€18.1B
07:00
 
€20.4B
€16.9B
07:00
 
0.0%
0.5%
n/a
 
 
11:30
 
 
8.8%
13:00
 
 
$442.58B
13:15
 
221.2K
221.2K
13:30
 
 
13:30
 
-2.0%
6.1%
13:30
 
65.7%
65.7%
13:30
 
 
4.25%
13:30
 
15.9K
53.7K
13:30
 
5.5%
5.5%
15:00
 
95.9
95.5
15:00
 
-0.3%
-0.3%
17:00
 
 
18:00
 
 
691
20:30
 
 
$33.5K
20:30
 
 
383.3K
20:30
 
 
$276.5K
20:30
 
 
¥-19.7K
20:30
 
 
€-53.4K
20:30
 
 
$-40.3K

 

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