Widespread risk-aversion was the main theme in Asia this Wednesday, triggered by aggressive selling the Japanese stock markets, which boosted the safe-haven bids for the Yen at the expensive of the higher-yielding oil and Treasury yields. As a result, the US dollar came under fresh selling pressure across its main competitors, benefiting the risk-sensitive currencies such as the Aussie and GBP. The Kiwi rallied sharply amid a broadly weaker USD and a beat on the NZ inflation expectations data. Meanwhile, the EUR/USD pair broke higher towards the 1.24 handle heading into a data-heavy EUR session today.
Main topics in Asia
Westpac-MI Consumer Sentiment fell by 2.3% to 102.7 - Westpac
Analysts at Westpac explained Westpac-MI Consumer Sentiment for February’ was marked by a wave of volatility in global share markets.
RBNZ NZ 2-year expectations 2.11 % vs. 2.02% last
The Reserve Bank of New Zealand (RBNZ) is out with its quarterly inflation expectations report, with the key details found below.
USD/JPY drops in tandem with Nikkei, weakest since Nov 2016
The bears regained control after a brief recovery seen in the USD/JPY pair, now pushing the rates southwards in a bid to print the lowest levels since November 2016.
Japan: Growth set to remain sluggish - Capital Economics
Marcel Thieliant, Senior Japan Economist at Capital Economics explained that GDP growth slowed sharply last quarter and we think that the economy won’t expand as strongly this year as it did in 2017.
Key Focus ahead
The EUR, GBP traders eagerly await the releases of the growth numbers from Germany as well as the Eurozone, which will reinforce optimism over the bloc’s economic prospects. Also, the Eurozone industrial production data will be reported among other minority reports. Meanwhile, the central bankers’ speeches will be also heard in Europe.
ECB policymaker and Germany’s Bundesbank (Buba) President Jens Weidmann will deliver the opening remarks at the Bundesbank Cash Symposium, in Frankfurt while SNB board member Zurbrugg will make a couple of appearances on the wires, speaking at the same event.
In the NA session, all eyes will be on the US CPI figures, followed by the retail sales report while the EIA crude inventories data is also due on the cards in the American morning.
EUR/USD catches fresh bids on notable USD supply, nears 1.2400
The EUR/USD pair traded with sizeable gains in Asia, as the bulls aimed to regain the 1.24 handle amid a broadly weaker US dollar, with attention turning towards the US inflation data release.
GBP/USD pushing up ahead of EU GDP release, looking for 1.3980
GBP/USD is finding buyers today, trading into 1.3915 ahead of European markets. Except for retail sales on Friday at 09:30 GMT, there's little Sterling-specific data on the calendar this week …
Dollar’s Rally Turning into a Dead-Cat Bounce?
I wouldn’t give up on the dollar quite yet, but DXY appears to be rolling over without having surpassed any significant peaks on the daily chart. This is bearish price action.
US inflation data is the big story
We get inflation data tomorrow, although it probably won't put the story to bed. The FT reports "According to economists, January's figures will show headline US inflation easing to 1.9 percent from 2.1 percent in December.
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.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.