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Forex Today: USD tracks USTs higher, EZ GDP and German CPI in focus

Forex today witnessed a bounce in the US dollar across its main competitors in Asia, as the greenback replicating Monday’s Asian moves. Broad-based US dollar rebound was mainly driven by a spike seen in 10-year Treasury yields to fresh 45-month tops.

 Amongst the Asia-pac currencies, the USD/JPY pair enjoyed some good two-way trading, as sellers continued to lurk above the 109 handle, knocking-off the rates back towards mid-108s. The Aussie traded on the back foot amid weaker commodities’ prices and below estimates Aus NAB data while Kiwi kept its range near 0.7330 region, underpinned by upbeat NZ trade data.

Meanwhile, the pound was under heavy selling pressure on Brexit uncertainty and EUR treaded water near 1.2380 region ahead of the key macro news from the Euroland.

Main topics in Asia

Australia NAB Business Confidence index hit 5-month high in December

The National Australia Bank (NAB) business confidence index rose 4 points to +11 index points in December; the highest level since July 2017, missing the estimate of +12 index points by a narrow margin.

US 10Y T-yield at 45-month high, is the bond bear market here?

The US 10-year treasury yield rose to 2.733% in Asia; its highest level since April 2014. Still, it is too early to call a bond bear market. That said, the yield is fast closing in on 2.76 percent - inverse head and shoulders neckline.

Theresa May is frustrating top EU officials - Sources - Bloomberg

Struggling to find support for her Brexit plan at home, UK Prime Minister Theresa May is asking European officials to come up with ideas on what kind of future relationship might be on offer, sources told Bloomberg.

Japan PM Adviser Hamada: Yen could firm in short-term

Reuters reports comments from a key Economic Adviser to the Japanese PM Abe, Koichi Hamada, with the key headlines found below.

Moody's: UK firms’ credit quality to remain stable in 2018 despite Brexit jitters

The US-based ratings agency, Moody’s Investors Service, is out with the latest report on "Non-financial corporates -- UK: Credit Trends - Strong liquidity and measured rate rises mitigate Brexit effect".

Key Focus ahead

Heading into Europe, markets eagerly await the Eurozone prelim flash Q4 GDP report and German CPI release for fresh impetus on the Euro. The UK net lending to individuals data combined with a few other minority reports will keep the GBP traders somewhat busy, as all eyes remain on the BOE Governor Carney’s speech due later in the American morning.

Also, of note remains the US CB consumer confidence and S&P/CS Composite-20 HPI y/y data, which will offer fresh incentives for the US dollar ahead of the key Trump’s address and FOMC decision due tomorrow.

EUR/USD: 1.2400 still on sight ahead EZ GDP, German CPI?

EUR/USD remains underneath its recent highs as the US Dollar finds its footing again. Looking ahead, the Eurozone GDP and German CPI will set the tone during London session.

GBP/USD - low odds of further near-term GBP gains?

GBP/USD options activity indicates a near-term top could be in place at 1.4345 (Jan. 25 high). The implied volatility premium for GBP calls over GBP puts has quickly faded…

Eurozone growth to remain strong in Q4 at 0.6% q/q - HSBC

In the view of the analysts at HSBC, the Eurozone GDP growth is expected to remain strong in Q4, at 0.6% q/q.

FOMC should emphasize continuity, with no significant changes - TDS

Analysts at TDS offer a sneak peek on what to expect from the FOMC policy announcement scheduled on Wednesday.

GMT
Event
Vol.
Actual
Consensus
Previous
Tuesday, Jan 30
09:30
 
£4.8B
£4.9B
09:30
 
£1.3B
£1.4B
09:30
 
63.500K
65.139K
09:30
 
 
3.7%
09:30
 
-0.1%
0.1%
10:00
 
0.6%
0.6%
10:00
 
2.6%
2.6%
10:00
 
18.6
18.4
10:00
 
1.3
1.3
10:00
 
8.9
9.1
10:00
 
1.70
1.66
10:00
 
116.3
116.0
13:00
 
1.7%
1.7%
13:00
 
-0.7%
0.8%
13:00
 
1.6%
1.6%
13:00
 
-0.6%
0.6%
13:55
 
 
3.8%
13:55
 
 
0%
14:00
 
6.4%
6.4%
15:30
 
 
16:30
 
 
21:30
 
 
4.755M
23:30
 
1.6%
0.5%
23:50
 
 
23:50
 
1.9%
3.6%

Author

Dhwani Mehta

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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