Forex Today: Yen rebounds in Asia on Japan GDP beat, eyes on UK GPP, US inflation


FX Today on the final trading day of this week saw the Yen replicating the moves seen in Asia on Thursday. The USD/JPY pair dropped sharply to 110.70 levels after the Yen was boosted by a big beat on the Japanese GDP figures and a cautious tone prevalent across the Asian equities. Escalating trade tensions between the US and the rest of the world and Yuan weakness continue to dampen the risk sentiment.

As a result, both the Antipodeans remained undermined, with the Kiwi having breached the 0.6600 support for the first time since March 2016 amid dovish RBNZ and a reduction in farm gate milk prices by Fonterra. The Aussie traded on the back foot near 0.7360 levels after the RBA trimmed 2018 inflation forecast, as read in the Statement of Monetary Policy (SoMP) published earlier today. However, the downside appeared cushioned, as the US dollar stalled its bullish momentum and consolidated broadly near three-week tops of 95.65.

Main topics in Asia

 

Japan GDP clears estimates as growth rebounds despite sluggish inflation

RBA SoMP: Decline in AUD would be positive for growth, inflation

New Zealand’s Fonterra cut its 2017/2018 farm gate milk price

South Korea’s FinMin: Deepening trade tensions, unemployment weigh on economy

USD/TRY hit a new record high in early Europe, TRY puts value at 7-year high

 

Key Focus ahead

We have a busy EUR calendar today, with a slew of macro news from the UK docket to dominate. However, the main focus will be on the monthly and quarterly UK second-quarter growth figures due at 0830 GMT, which are expected to tick higher, offering some relief to the GBP bulls. Also, the UK goods trade balance and manufacturing production data will be eyed for some near-term trading impetus. Moving on, the NA session sees the critical US CPI release alongside the release of the Canadian jobs data at 1230 GMT.

EUR/USD: Bears reinforced ahead of the US CPI release

An above-forecast CPI print would bolster the already bearish technical setup and open the doors to a drop below 1.15. On the other hand, EUR/USD could have another ago at the pennant resistance(lower end of the pennant) if the US CPI prints below estimates. 

GBP/USD facing an active Friday with UK GDP, US CPI in the barrel

There is a good-sized docket of data for the GBP today, but market's primary focus will be on the GDP figures for the UK and the US' upcoming CPI reading.

UK Q2 GDP seen around 0.4% m/m in June - Barclays

The Barclays Research Team offers its insights on today’s UK second-quarter GDP monthly and quarterly figures that will drop in at 0830 GMT.

How to trade the UK GDP with GBP/USD

The quarterly UK GDP report provides a broad overview of the economy and moves the Pound. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.

US CPI to rise 0.1% m/m in July – Barclays

According to the Barclays Research Team, the US inflation figures are expected to have edged higher in the month of July.

How to trade the US Inflation data with EUR/USD

The US Consumer Inflation data and especially Core CPI are critical the US Dollar. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.

Canada: Economy to add 20k jobs in July – TDS

Analysts at TD Securities (TDS) provide a brief preview of what to expect from today’s Canadian employment data due on the cards at 1230 GMT.

GMT
Event
Vol.
Actual
Consensus
Previous
Monday, Aug 06
24h
 
 
Friday, Aug 10
08:30
 
1.3%
1.2%
08:30
 
0.4%
0.2%
08:30
 
1.0%
1.1%
08:30
 
0.4%
-0.4%
08:30
 
0.3%
0.4%
08:30
 
0.7%
0.8%
08:30
 
1.6%
2.0%
08:30
 
0.3%
-0.4%
08:30
 
0.6%
0.4%
08:30
 
£-3.600B
£-3.491B
08:30
 
£-12.05B
£-12.36B
08:30
 
£-2.50B
£-2.79B
08:30
 
0.2%
0.3%
n/a
 
0.4%
0.4%
12:30
 
0.2%
0.2%
12:30
 
2.3%
2.3%
12:30
 
3.0%
2.9%
12:30
 
0.2%
0.1%
12:30
 
251.981
251.989
12:30
 
257.579
257.310
12:30
 
5.9%
6.0%
12:30
 
17.0K
31.8K
12:30
 
65.4%
65.5%
17:00
 
 
859
18:00
 
$-79B
$-75B

 

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