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Forex Today: Yen rebounds amid Asia risk-off, German Ifo, UK GDP eyed

The Japanese currency stole the limelight across the fx space in Asia this Thursday, despite the FOMC minutes-induced rally in Treasury yields, as risk-aversion emerged the key theme after the Asian equities joined the Wall Street sell-off. Rising expectations of a faster pace of the US tightening pushed the Treasury yields higher across the curve, in turn, weighed down on the alternative risk assets such as the equities. On the other hand, the Antipodeans, the EUR, and GBP traded in the red zone, as the US dollar held steady near 8-day tops of 90.08 versus its main competitors.

Among the commodities, gold prices dropped nearly -0.50% to $ 1325 levels while WTI was down 1%, as a broadly stronger dollar offset a report of a drop in the US crude stockpiles.

Main topics in Asia

UK Treasury Select Committee to launch cryptocurrency inquiry - Reuters

The UK's Treasury Select Committee, a bipartisan group of MPs from both sides of the line, is set to begin an official inquiry into cryptocurrencies and blockchain technology, according to a UK statement.

UK Cabinet angered by Theresa May's Brexit strategy paper - The Telegraph

As reported by The Telegraph, Theresa May's official strategy document found no friends in the UK Parliament.

German finance ministry expects growth swing to continue - Reuters

The German Finance Ministry's latest monthly report shows incredibly bullish expectations; details via Reuters.

Nikkei tumbles back below 22,000.00 as markets pull back

Japan's leading Nikkei 225 Index is sinking as risk aversion takes hold of the Asian markets, testing 21,640.00 as of writing. 

Fed's Kashkari - Fed should be patient, allow inflation to build

Fed's Kashakri's comments are crossing the wires via Reuters …

Fed's Kashkari - Aggressive rate hikes could push economy into recession

Fed's Kashkari is worried that aggressive interest rate hikes could invert the yield curve and tip economy into recession. 

Key Focus ahead

Markets gear up for another eventful calendar ahead, with the speech by the FOMC member Quarles, eyed for further insights on the Fed’s rate hike prospects for this year. In the European session, the German Ifo business surveys and UK Q4 GDP second revision will offer fresh trading impetus to the EUR, GBP traders, as they await the ECB monetary policy meeting minutes for fresh cues on the bank’s tapering plans.

The NA session is also expected to remain busy, as the Canadian retail sales will be reported at 1330GMT. At the same, the US will report its weekly unemployment claims data, following which the Fed officials Dudley and Bostic will deliver their respective speeches. Also, of interest, will be the US EIA crude inventories report that is expected to provide fresh direction on oil prices.

EUR/USD - Down 2% from recent highs, but long-run bull outlook intact

The EUR/USD pair fell to 1.2265 in Asia - the lowest level since Feb. 12, tracking the post-Fed minutes rise in the treasury yields and the resulting widening of the US-DE two-year bond spread in the USD positive manner.

GBP/USD drooping under the weight of Brexit fears ahead of UK GDP figures

The UK will see GDP figures at 09:30 today, with median forecasts anticipating figures to come in at 1.5% for the headline figure, unchanged from the previous reading.

UK Q4 GDP to be confirmed at 0.5% q/q - Barclays

The Barclays Research Team offer a sneak peak on what to expect from today’s UK Q4 GDP second estimate due on the cards at 0930GMT.

Key Events Ahead

GMT
Event
Vol.
Actual
Consensus
Previous
Friday, Feb 16
24h
 
 
Saturday, Feb 17
24h
 
 
Sunday, Feb 18
24h
 
 
Monday, Feb 19
24h
 
 
24h
 
 
24h
 
 
24h
 
 
Tuesday, Feb 20
24h
 
 
24h
 
 
Wednesday, Feb 21
24h
 
 
Thursday, Feb 22
05:15
 
 
n/a
 
 
5.5%
n/a
 
 
8.6%
09:00
 
127.0
127.7
09:00
 
107.9
108.4
09:00
 
117.0
117.6
09:30
 
1.5%
1.5%
09:30
 
0.5%
0.5%
09:30
 
0.5%
0.5%
09:30
 
2.4%
1.7%
09:30
 
0.4%
0.4%
11:00
 
13%
12%
12:30
 
 
13:30
 
1.930M
1.942M
13:30
 
230K
230K
13:30
 
0.3%
1.6%
13:30
 
0.2%
0.2%
15:00
 
 
15:30
 
-144B
-194B
16:00
 
1.333M
1.841M
16:00
 
18
16
17:10
 
 
n/a
 
 
2.565%
20:30
 
 
21:45
 
0.7%
0.5%

Author

Dhwani Mehta

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.

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