Broad-based US dollar strength was the main theme in Asia on Monday, in the wake of the US tax reform bill passage and faulty ABC reports on Flynn. The greenback witnessed a bullish opening gap and extended the advance amid rallying Treasury yields, which weighed down heavily on the safe-haven Japanese yen. However, the Swiss franc was the weakest across the fx board, followed by the Yen and Kiwi.
On the data front, the Australian MI inflation gauge and company operating profits, both disappointed markets and weighed down on the Aussie while the pound stood resilient on hopes of a Brexit deal.
Amidst weaker oil prices and Asian stocks, the appetite for risky assets was restricted. However, the safe-haven gold failed to benefit from cautious market sentiment, which was offset by a broadly higher USD.
Main topics in Asia
NZ Treasury - Flatter house prices a drag on consumption growth
The New Zealand Treasury monthly economic analysis for November shows the flatter house prices are likely to act as a drag/or provide less impetus to consumption growth than in recent years.
Australia Melbourne Institute Inflation at 4-month high
The Australian Melbourne Institute inflation index for November rose 2.7 percent; its highest since July. Month-on-month, inflation rose 0.2 percent vs. previous month's print of 0.3 percent.
Dollar index strengthens as the treasury yields rise
The dollar index (DXY) rose to a high of 93.09 in Asia as the treasury yields ticked higher on Senate's approval of tax overhaul and following the faulty ABC report on former National Security adviser Flynn.
Half of Britons support a second vote on Brexit, poll finds - Reuters
According to a new poll, half of Britons support a second vote on whether to leave the European Union and a majority think the government may be paying too much money to the EU to end the deadlock.
Japan may cut corporate tax rate to 20% through incentive - Nikkei
The Nikkei Asian Review out with the latest headline on the Japanese fiscal scenario, noting that the government may cut the corporate tax rate to 20% through incentive.
Key Focus ahead
Heading into a new week, the economic calendar remains fairly light, with the Eurozone Sentix investor confidence slated for release ahead of the UK construction PMI and Eurozone PPI data. Also, of note remains the Eurogroup meeting and US factory orders data. However, the Dec 4 Brexit deadline remains in the spotlight, which is expected to have a major impact on the GBP markets and on the overall market sentiment as well.
GBP/USD: Bulls nervous ahead of the Dec 4 Brexit deadline, UK PMI
The GBP/USD pair failed yet another attempt to survive above 1.35 handle, sending the rates lower to now consolidating around 1.3470 levels, as we gradually head towards the European open.
EUR/USD defends trendline amid USD rebound, Put OI spikes
Despite the US tax reform optimism and fading political uncertainty in the US, the EUR/USD managed to defend the trendline sloping upwards from the Nov. 7 low and Nov. 11 low.
RBA to keep rates steady at tomorrow's meeting - Bloomberg survey
A Bloomberg survey of 26 banks shows the Reserve Bank of Australia (RBA) is expected to keep the interest rate unchanged at 1.5 percent.
Preview of the week ahead - Nomura
"We expect a solid increase in November nonfarm payroll employment, consistent with continued strong improvement in the labor market.”
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.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold price defends gains below $2,400 as geopolitical risks linger
Gold price is trading below $2,400 in European trading on Friday, holding its retreat from a fresh five-day high of $2,418. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row, supported by lingering Middle East geopolitical risks.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.