Forex Today: Yen catches bid on BoJ JGBs trim, EZ CPI, US GDP on tap

Dhwani Mehta FXStreet

The overnight bullish tone around the US dollar extended into Asia this Wednesday, as the dust settled over the new Chair Powell’s Congressional testimony, which cheered the hawks. However, the JPY bulls fought back control following the reports that the BoJ trimmed the purchases of JGBs with 25-40 years maturity. Meanwhile, the Antipodeans remained depressed on the Chinese PMIs miss and downbeat OZ fundamentals.

Among other related markets, the Asian equities were dragged lower by the Nikkei 225 index, in the wake of the renewed JPY strength. Both crude benchmarks traded in the red zone while gold prices were little changed near $ 1318 levels.

Main topics in Asia

The Australian Treasury Secretary, Fraser, offering positive assessment of Aussie economy

Australia Treas Sec Fraser: Budget surplus targets remain on track.

China PMI: Manufacturing, Services PMI both miss estimates, AUD exposed to short-side risks

Chinese Manufacturing and Services PMI came in at a miss, and market reaction looks set to send the Aussie lower for it.

Canada’s FinMin Morneau: Interest rates still accommodative

Reuters reports comments from the Canadian Finance Minister Morneau, delivered in an interview following the budget release earlier.

BOJ has reduced purchases of JGBs with 25-40 years to maturity by JPY 10 billion

The news is crossing the wires via Bloomberg that Bank of Japan (BOJ) has reduced the purchases of Japanese Government Bonds (JGBs) maturing in 25 to 40 years to JPY 70 billion vs. JPY 80 billion previous.

NZD/USD - Off 19-day low, is a corrective rally on the cards?

The NZD/USD has recovered from the 19-day low of 0.7220 and could move above the 50-day moving average (MA) of 0.7245, given the relative strength index (RSI) on the 1-hour chart has begun to diverge in favor of the NZD bulls.

Key Focus ahead

Another busy session on the cards today, with the Gfk consumer climate and unemployment change numbers due to be released out of Germany while from the Euroland, we have the flash CPI estimate dropping in at 1000 GMT.

Looking ahead, the NA session also holds plenty of risk events, including the Canadian RMPI data, followed by the US prelim GDP, Chicago PMI and pending home sales releases. The official US government crude supplies data, as reported by the EIA, will also remain in focus for fresh trading impetus in oil prices and the CAD.

EUR/USD risks double top bearish reversal on widening mon pol divergence

The bearish double top reversal may happen today if the Eurozone preliminary CPI prints below expectations and the second estimate of the US Q4 shows the economy expanded at a faster rate than previously reported.

GBP/USD hoping to hold onto 1.39 ahead of EU CPI, US GDP

The Sterling fell against the US Dollar in Tuesday's trading, spurred on by Fed chairman Jerome Powell's surprisingly bullish take on the US economy.

Eurozone flash CPI: Core figures to tick higher in January - Nomura

Analysts at Nomura provide a sneak peek on what to expect from today’s Eurozone flash CPI estimate due to be reported today at 1000 GMT.

GMT	Event	Consensus	Previous
Friday, Feb 23
24h	EUR European Council meeting
Wednesday, Feb 28
05:00	JPY Housing Starts (YoY)	-5.0%	-2.1%
05:00	JPY Construction Orders (YoY)		-8.1%
05:00	JPY Annualized Housing Starts	0.940M	0.936M
07:00	EUR Gfk Consumer Confidence Survey	10.9	11.0
09:00	EUR Unemployment Change	-15K	-25K
09:00	EUR Unemployment Rate s.a.	5.4%	5.4%
n/a	EUR 10-y Bond Auction		0.69%
10:00	EUR Consumer Price Index - Core (YoY)	1.1%	1.0%
10:00	EUR Consumer Price Index (YoY)	1.2%	1.3%
12:00	USD MBA Mortgage Applications		-6.6%
12:30	CAD Industrial Product Price (MoM)	0.5%	-0.1%
12:30	CAD Raw Material Price Index	-0.1%	-0.9%
13:30	USD Gross Domestic Product Annualized	2.5%	2.6%
13:30	USD Gross Domestic Product Price Index	2.4%	2.4%
13:30	USD Core Personal Consumption Expenditures (QoQ)	1.9%	1.3%
13:30	USD Personal Consumption Expenditures Prices (QoQ)	2.8%	1.5%
14:45	USD Chicago Purchasing Managers' Index	64.2	65.7
15:00	USD Pending Home Sales (YoY)		-1.8%
15:00	USD Pending Home Sales (MoM)	0.3%	0.5%
15:00	USD Fed's Powell Speech
15:30	USD EIA Crude Oil Stocks change	2.675M	-1.616M
21:45	NZD Terms of Trade Index	-0.2%	0.7%
22:30	AUD AiG Performance of Mfg Index		58.7
23:50	JPY Capital Spending	3.1%	4.2%
23:50	JPY Foreign bond investment		¥-553.1B

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.

GBP/USD grinds higher to 1.3650 as USD recovery falters

GBP/USD grinds higher to near 1.3650 in Tuesday's European session. The US Dollar recovery falters, despite US sanctions on Iran, as hopes for diplomatic efforts creep back amid reports that Pakistan is carrying an offer to Iran to halt the siege and lift sanctions under the Memorandum of Understanding.

EUR/USD recovers toward 1.1700 as USD loses traction

EUR/USD is recovering ground toward 1.1700 in European trading on Tuesday. The pair draws support as the US Dollar rebound loses traction amid fresh diplomacy hopes in the Middle East conflict. An upbeat German IFO Survey also aids Euro bulls.

Gold remains depressed below $4,650 on firmer USD, Fed risks, and Middle East tensions

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Bitcoin's rally above $80,000 shows signs of overheating

Bitcoin extends gains, trading above $80,000 at the time of writing on Tuesday following its strongest weekly rise in more than three years. Institutional demand continues to support this rally, with spot Exchange Traded Funds recording positive inflows on Monday.

Iran and Fed outlook remain uncertain after Bessent’s comments and ahead of Jackson Hole

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$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.