Forex Today: White House turnover spurs Asia risk-off, Eyes on EZ CPI

The overnight US dollar rebound lost legs in Asia on the final trading day of this week, as the White House woes returned to markets, with Trump looking to fire the US National Security Adviser H.R. McMaster. Subsequently, a fresh bout of risk-aversion gripped the financial markets, boosting the demand for safe-haven Yen at the expense of the risk assets such as the Antipodeans, equities and oil prices. The USD/JPY pair gave up the 106 handle amid the renewed North Korea fears, Trump’s turnover and looming trade war concerns. However, the Kiwi was the biggest loser, in the wake of downbeat NZ business manufacturing index numbers and increased nervousness ahead of the Fed and RBNZ monetary policy meeting due next week.  

Main topics in Asia

Japan Prime Minister Abe knew about altered documents - Japan press

Japanese press sources are stating that the Japanese Prime Minister, Shinzo Abe, knew about alterations made to documents in the unraveling government land sales scandal. 

North Korean nuclear reactor showing signs of activity - CNN

According to reporting from CNN, satellite imaging is showing activity at a nuclear reactor at the Yongbyon research facility.

Trump to remove US National Security Adviser McMaster

The news is crossing the wires via Washington Post that US President Trump has fired H.R. McMaster as his national security adviser and is actively discussing potential replacements.

Trump has decided to oust McMaster, but timing of departure is unclear - WSJ

According to the Wall Street Journal (WSJ) report, the US National Security Adviser H.R. McMaster is expected to be fired, but the timing of his exit is still unclear.

IMF’s Lagarde: Trade wars are unwinnable

Reuters reports headlines from the International Monetary Fund (IMF) Chief Lagarde, as she commented in the IMF Blog post.

Key Focus ahead

Heading into Europe, we have limited macro releases on the cards, except for the German WPI and Eurozone final CPI, both of which are expected to have little impact on the EUR markets. Meanwhile, the NA session offers the Canadian manufacturing sales alongside the releases of the US housing data. Later in the US, the capacity utilization rate, industrial production and prelim UoM consumer sentiment will also draw some attention for fresh incentives on the US dollar moves.

EUR/USD - Rates futures put EUR on the back foot ahead of the Fed

The EUR/USD remains trapped in 1.2250-1.2450 range even though the top European Central Bank (ECB) officials stressed this week that stimulus will end only after inflation starts moving towards the 2 percent target.

GBP/USD trying to hold above 1.39 as risk-off drives the Greenback

The macro calendar is thin for the Sterling and the Greenback for Friday, but some knock-on volatility could present itself if EU CPI figures come out at a big hit or miss, but chances are slim as these are non-preliminary numbers. 

Dollar regains traction as market anticipates rate hike at next Fed meeting

The greenback ended broadly higher against a majority of its peers on Thursday as investors look forward to next week's Federal Reserve meeting where another interest rate hike is widely expected.