Forex Today: Yen crosses bid despite G7 debacle, trade fears may hurt USD

The FX markets showed uncanny resilience to heightened trade tensions in Asia. The US President Donald Trump’s decision to abruptly withdraw his support for a Group of Seven (G7) communique and the attack on his Canadian counterpart Justin Trudeau did put a bid under the anti-risk JPY in Early Asia. But, the risk sentiment unexpectedly stabilized, lifting the Yen cross higher.

For instance, USD/JPY rose from 109.28 to 109.83. Also, AUD/JPY - the risk barometer, rose from 82.95 to 83.56, signaling risk reset. Further, the equities also picked up a bid. Nikkei, Hang Seng, and NIfty posted gains, while S&P/ASX 200 and Shanghai Composite reported moderate losses.

Key news in Asia

The US could struggle to re-isolate North Korea as Kim turns to China for help with the economic transformation

As reported by Reuters, US President Trump may have a tough time re-isolating North Korea if the upcoming Trump-Kim summit takes a turn.

Germany's Merkel: US support withdrawal from G7 communique is sobering

German Chancellor Angela Merkel called Trump's decision to withdraw support from G7 communique sobering and bit depressing and reiterated readiness to implement tit-for-tat tariffs.

Trump tweets: "We protect Europe and then get unfairly clobbered on trade"

President Trump singled out German regarding NATO Payments and stressed the need to correct US-Europe trade imbalances.

Key focus ahead

The West is in a crisis of sorts after Trump pulled support for a G7 communique that called for a fair and balanced trade. So, the response from the European and US stock markets to the developments over the weekend will likely guide the FX markets. The Yen crosses may rise further if the European and US stocks report gains.

Also, heightened trade tensions may complicate matters for the Fed, so, the greenback could run into offers. But, the ECB and other major central banks are not immune to trade tensions either. Hence, the losses in the greenback will likely be moderate. 

Amid the trade worries, the UK Office for National Statistics (ONS) is scheduled to release UK manufacturing data. An above-forecast reading could strengthen the bid tone around GBP.


EUR/USD: Corrective rally stalls on weak data, conflicting signals on the charts

GBP/USD remains familiar with 1.34 as impending rate hike, Brexit developments freeze traders

USD/JPY makes a run for 110.00 as risk appetite swings back into the Monday markets

USD/CAD fades spike to 1.30



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.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD tumbles to five-week low on rising US yields, energy crisis

EUR/USD has tumbled below 1.17, hitting the lowest since August 20 as Europe struggles with soaring gas prices and China suffers power cuts. Fed Chair Powell is set to testify and comment about the bank's recent taper signal. 


GBP/USD drops towards 1.3650 amid firmer dollar, energy crisis

GBP/USD is dropping towards 1.3650, undermined by the US dollar's strength and the UK's fuel problem. The British army is on standby to mitigate fuel shortages. The pound ignores the hawkish comments from BOE Governor Bailey. 


XAU/USD drops to $1,735 area amid surging US bond yields

Gold witnessed fresh selling during the early European session and dropped to the $1,735 area or the lowest level since August 11 in the last hour.

Gold News

Crypto markets prepare for a bullish October

Bitcoin price shows signs of bullish breakout as it traverses a falling wedge. Ethereum price also displays an optimistic outlook as it forms a descending parallel channel.

Read more

Conference Board Consumer Confidence Preview: Unhappy but still spending

The collapse of consumer optimism in August has not exacted the expected toll from American spending, the most important factor in sustaining the US  economic recovery. August’s confidence reading at 113.8 was the lowest since February.

Read more