Forex Today: USD jumps in sync with risk amid trade truce, German CPI eyed
Forex today in Asia cheered a renewed risk-on wave, fueled by the reports that the US-China have reached a tentative trade truce, as markets await the G20 Summit. The anti-risk Yen slipped across the board while the safe-haven Gold traded on the back foot below 1410 levels.
The USD/JPY pair popped the 108 handle while the AUD/USD pair extended the upside to 0.70 handle. However, the further upside was limited by the resurgent US dollar demand across the board, in the face of trade optimism that would ease the Fed rate cut expectations. The Treasury yields also traded firmer, leaving the EUR/USD and the Cable under pressure. The Kiwi consolidated the gains below the 0.67 handle amid negative oil prices. The Swiss franc suffered heavy losses, as the USD/CHF pair rallied above 0.9800 on a better sentiment towards the risk assets.
Main Topics in Asia
Brexit: Remainer rebel MPs to mount a dramatic bid to block a no deal brexit next week – The Sun
Australia leads secret trade negotiations that will sideline US – The Sydney Morning Herald
NZD/USD: No response to dismal New Zealand business confidence reading
China's industrial profits rebound 1.1% y/y in May, Aussie tests 0.7000
Goldman Sachs slashes US 10-year yield forecast to 1.7% - Bloomberg
Sources: US-China reported to have reached a trade truce – SCMP
Japan’s Suga: Absolutely no talk of reviewing US-Japan security
S. Korean UnificationMin: Recent comments made by North Korea shows mistrust still remains
WTI seesaws around 200-D EMA as investors ascertain scope for trade truce at G20
US Pres. Trump calls on India's PM Modi to withdraw recently imposed tariffs, Rupee trims losses
Key Focus Ahead
Thursday’s macro calendar looks a busy one, with a string of Eurozone business and consumer confidence numbers dropping in at 0900 GMT, followed by the German Preliminary Consumer Price Index (CPI) for June, due at 1200 GMT.
Ahead of the US open, the US weekly Jobless Claims, Q1 Final GDP revision and Personal Consumption Expenditure Prices will be reported at 1230 GMT. Also, of note remains the US Pending Home Sales due at 1400 GMT among other minority reports.
Despite the macro releases, the US-China trade-related headlines will continue to drive the market sentiment and US dollar price-action amid easing Fed rate cut expectations.
EUR/USD struggles despite US-China trade truce, focus on German inflation
EUR/USD is on the defensive, but holding above the 200-day moving average. Reports of US-China trade truce are boding well for the US Dollar. An above-forecast German CPI could yield a rally in EUR/USD.
GBP/USD: Less attention to UK politics as all eyes on trade headlines
UK political hustings, statements from MPs couldn’t lure the GBP/USD traders. Markets await fresh headlines from the G20 meeting for fresh impulse. US data can offer intermediate trade opportunities.
Gold technical analysis: Off 6-year highs, but breakout on monthly chart a done deal
Gold has pulled back from six-year highs reached earlier this week. Daily chart indicators reporting overbought conditions. The monthly chart shows a channel breakout and scope for a rally to $1,522.
US Q1 GDP Final Revision Preview: Look ahead not behind
The second revision and third version of the first quarter annualized GDP are expected to be unchanged at 3.1%. The initial release was 3.2% and the first revision was 3.1%.
White House: Trump-Xi trade meeting set for Saturday at 0230 GMT in Osaka
A White House spokesman told Reuters late-Wednesday, the US. President Donald Trump and Chinese President Xi Jinping will hold the trade talks in Osaka at 11:30 a.m. local time (0230 GMT) on Saturday at the G20.
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.
