Forex Today: Yen bid on risk-off, Aussie unmoved by RBA, UK construction PMI in focus


Forex Today was a mixed bag with most G10 currencies trading on the back foot, despite broad-based US dollar weakness, as cautioned prevailed amid risk-off in the Asian stock markets, with the July 6 tariff deadline nearing. More so, continued Yuan weakness combined with downbeat fundamentals added to risk-averse market conditions.

The Japanese Yen remained better bid near 110.80 against its US counterpart, having tested the 111.15 area. The AUD/USD pair remained suppressed near 0.7330 levels, as the status-quo maintained by the Reserve Bank of Australia (RBA) had virtually no impact on the Aussie. Meanwhile, Kiwi kept minor losses around the 0.67 handle following a dip in New Zealand’s business confidence in the second quarter.

Oil prices outperformed amidst risk-off, as Libya declared a force majeure on some of its key oil facilities. WTI is fast approaching the $ 75 threshold while Brent flirts with $ 78 handle. Gold prices on Comex traded subdued near $ 1240. Meanwhile, the Treasury yield curve stood at the flattest since 2007 and could reverse in the coming days.

Main topics in Asia

Trump makes a veiled threat towards the WTO - Reuters

As reported by Reuters, US President Donald Trump made a thinly-veiled threat against the WTO on Monday.

US' Pompeo heading to North Korea on Thursday for denuclearization talks - Reuters

As reported by Reuters, US Secretary of State Mike Pompeo will be traveling to North Korea on Thursday to discuss denuclearization on the Korean peninsula.

BoJ to cut its inflation forecasts this month - Japan Press

According to Japanese media outlet the Nikkei Asian Review, The Bank of Japan (BoJ) is likely to reduce their inflation forecast to 1.5% at their outlook meeting later this month.

Oil pops in the overnight session, WTI nearing $75 as Libya declares force majeure on key oil supplies

New Zealand FinMin Robertson: There is more to the economy than one business confidence survey

New Zealand Finance Minister Robertson is out on the wires now, via Reuters, trying to downplay the negative impact of the poor NZ business confidence survey released earlier today.

USD/CNY: Yuan breaches 6.7 for the first time in nearly a year

The Yuan extends its downward spiral and broke the key 6.70 support area versus its American rival for the first time since September 2017, now recovering some ground to trade near 6.6950 levels.

Reserve Bank of Australia steers rates on steady course, as widely expected

The Reserve Bank of Australia (RBA) at its monetary policy meeting held today, left the official cash rate (OCR) unchanged at a record low of 1.50 percent for the twenty-first straight meeting.

Asian stocks continue to slide as traders' fears of a trade war continue to ramp up

Key Focus ahead

There is nothing of relevance, in terms of economic data, to be reported in the European session, except for the UK construction PMI and a couple of second-liner releases from the Euroland, viz., the retails sales and producer price index (PPI). The UK construction PMI is expected to arrive at 52.0 in June versus 52.5 last.

In the NA session, the Canadian Markit manufacturing PMI data will drop in at 1330 GMT, followed by the releases of the US factory orders and IBD/TIPP Economic Optimism. Also, in focus remains the New Zealand dairy giant, Fonterra, fortnightly dairy auction results that will be published ahead of the American Petroleum Institute (API) weekly crude oil stockpiles report.

Besides, the European Central Bank (ECB) Chief Economist Peter Praet is due to make a speech at 1600 GMT.

EUR/USD: Last week's indecisive market makes this week's close pivotal

The EUR/USD pair created a doji candle last week, signaling indecision in the marketplace and this week's close will likely set the tone for the next move in the common currency.

GBP/USD close to the 1.31 barrier with a thin Tuesday on the docket

Tuesday brings the June Construction PMI at 08:30 GMT, though with markets forecasting a decline from 52.5 to 52.0, it's looking unlikely that the GBP/USD will catch a break on the data unless the figure prints significantly higher than the expectation.

GMT
Event
Vol.
Actual
Consensus
Previous
Thursday, Jun 28
24h
 
 
Friday, Jun 29
24h
 
 
Monday, Jul 02
24h
 
 
Tuesday, Jul 03
08:30
 
52.0
52.5
09:00
 
0.4%
0.0%
09:00
 
2.4%
2.0%
09:00
 
0.1%
0.1%
09:00
 
1.4%
1.7%
n/a
 
 
1.61%
12:55
 
 
3.1%
12:55
 
 
-0.5%
13:30
 
55.4
56.2
13:45
 
 
66.9
14:00
 
0.0%
-0.8%
n/a
 
54.2
53.9
n/a
 
 
-1.2%
16:00
 
 
19:30
 
17.00M
16.91M
20:30
 
 
-9.228M
22:30
 
 
59
23:01
 
 
-1.1%
Wednesday, Jul 04
24h
 
 
00:30
 
51.6
51.0
01:00
 
 
1.5%
01:30
 
0.3%
0.4%
01:30
 
1,200M
977M
01:30
 
 
-2%
01:30
 
 
0%

 

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