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Forex Today: Yen pops, DXY drops in Asia, UK retail sales in focus

Dhwani Mehta FXStreet

The Japanese Yen continued to steal the limelight in Asia, as the bulls cheered Kuroda’s nomination for the second term as a BoJ Governor while persistent broad-based US dollar weakness added to the USD/JPY downward spiral. Most majors benefited from the USD-dumping theme, although the Kiwi remained the laggard, despite solid NZ business manufacturing numbers. The Aussie traded with sizeable gains, deriving support from RBA Governor Lowe’s hawkish remarks.

Among other related markets, the Asian equities witnessed a risk-on rally while oil prices and Treasury yields moved higher ahead of a busy calendar ahead.

Main topics in Asia

Key event: RBA Governor Lowe speaking: next move is more likely to be up

The Reserve Bank of Australia Governor Lowe is speaking today and appearing in front of parliament's House of Representatives' Standing Committee on Economics from 2230 GMT. He is delivering a prepared text and then will be taking questions.

RBA's Lowe - Would prefer lower AUD

The Reserve Bank of Australia's Governor Philip Lowe is speaking today before the Australian parliament's Standing Committee on Economics.

BoJ's Kuroda: maintaining easing for now

Bank of Japan Governor Kuroda is in Japan's parliament today: publicly addressing market participants in the face of a constantly-strengthening Yen.

Japan’s Aso: No change in Govt stance to respond to fx moves as appropriate

Japanese Finance Minister Taro Aso was on the wires earlier today, via Reuters, reiterating his comments on the fx markets and cryptocurrencies.

Japan’s Govt nominates Kuroda for another term - Nikkei

Nikkei, a Japanese daily, reports that the Japanese Government nominated the current BoJ Governor Kuroda for another term.

China holdings of US treasuries rose in 2017 by most in seven years

Bloomberg report says China's ownership of US Treasuries rose in 2017 by most in seven years.

No relief in sight? Dollar Index hits three-year low

The USD sell-off continues and apart from chart driven factors, there is very little out there that could lift the battered currency.

Key Focus ahead

After a volatile Asian session, we progress towards the European opening bells, with the main highlight for the session ahead likely to be the UK retail sales report amid a data-dry EUR docket.

Meanwhile, the NA calendar remains quite action-packed, with a fresh batch of the US macro news up on the sleeves, including the housing starts, building permits, and prelim UoM consumer sentiment. From Canada, the foreign securities purchases and manufacturing sales data will be published alongside the US economic releases at 1230 GMT.

EUR/USD clocks fresh 3-year high in Asia

The USD sell-off continues on fears of hard landing in the US. Having closed above 1.25 yesterday, the EUR/USD jumped to 1.2545 in Asia - the highest level since December 2014.

GBP/USD looks to continue run to 1.4344, eyes on UK retail sales

Sterling is shaping up to continue the week's theme of climbing over the US Dollar, quietly slipping passed yesterday's high of 1.4104 in Tokyo trading.

UK Jan retail sales to show the most anemic of rebounds – Societe Generale

Analysts at Societe Generale offer a sneak peek on what to expect from today’s UK retail sales data that will be released at 0930 GMT.

GMT	Event	Consensus	Previous
Friday, Feb 16
07:00	EUR Wholesale Price Index (MoM)	0.2%	-0.3%
07:00	EUR Wholesale Price Index (YoY)		1.8%
08:20	EUR ECB Cœuré Speech
09:30	GBP Retail Sales (YoY)	2.6%	1.4%
09:30	GBP Retail Sales (MoM)	0.5%	-1.5%
09:30	GBP Retail Sales ex-Fuel (MoM)	0.6%	-1.6%
09:30	GBP Retail Sales ex-Fuel (YoY)	2.5%	1.3%
13:30	USD Housing Starts (MoM)	1.234M	1.192M
13:30	USD Building Permits (MoM)	1.300M	1.302M
13:30	USD Housing Starts Change	3.4%	-8.2%
13:30	USD Building Permits Change	3.5%	-0.1%
13:30	USD Import Price Index (MoM)	0.6%	0.1%
13:30	USD Import Price Index (YoY)	3.1%	3.0%
13:30	USD Export Price Index (MoM)	0.3%	-0.1%
13:30	USD Export Price Index (YoY)	2.9%	2.6%
13:30	CAD Manufacturing Shipments (MoM)	0.2%	3.4%
13:30	CAD Canadian portfolio investment in foreign securities		$-4.59B
13:30	CAD Foreign portfolio investment in Canadian securities	$19.18B	$19.56B
15:00	USD Michigan Consumer Sentiment Index	95.5	95.7
18:00	USD Baker Hughes US Oil Rig Count		791
20:30	USD CFTC USD NC net positions		$43.79K
20:30	USD CFTC Gold NC net positions		$190.9K
20:30	USD CFTC Oil NC net positions		739.1K
20:30	EUR CFTC EUR NC net positions		€140.8K
20:30	AUD CFTC AUD NC net positions		$13.7K

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 slides below 1.3250 after failing to break through 23.6% Fibo

The GBP/USD pair meets with a fresh supply during the Asian session on Wednesday and moves away from a nearly two-week high around the 1.3275 region, touched the previous day. Spot prices currently trade around the 1.3235 zone, down 0.20% for the day, as traders look to speeches from Bank of England Governor Andrew Bailey and Federal Reserve Chair Kevin Warsh for a fresh impetus.

EUR/USD keeps losses near 1.1400 after soft Eurozone inflation data

EUR/USD keeps the offered tone intact near 1.1400 in European trading on Wednesday, pressured by softer Euronze and German inflation readings and receding bets for aggressive tightening by the European Central Bank (ECB). Traders will take more cues from the US Manufacturing PMI due later in the day.

Gold stays in red below $4,000, awaits Warsh's speech

Gold remains under selling pressure below $4,000, in the red for the third straight day on Wednesday. The Iran uncertainty and Fed hike bets support the USD, weighing on the commodity. Traders now look to Fed Chair Warsh's speech and the US data for a fresh impetus.

ISM Manufacturing PMI expected to signal continued expansion in the US

Attention shifts to Wednesday’s release of the June ISM Manufacturing Purchasing Managers Index, one of the most closely followed indicators of activity in the US manufacturing sector and an important barometer of the broader economy. Markets expect the headline index to remain unchanged at 54.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The European Central Bank Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Federal Reserve, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.