Risk-recovery emerged as the main underlying theme in Asia this Wednesday, reflective of a rebound in the Asian stocks, Wall Street futures and Treasury yields. A slowdown in the number of new coronavirus cases in China’s Hubei province, the epicenter, and China’s containment efforts help subside the fears over the economic fallout of the virus outbreak.

The safe-haven yen was the weakest across the fx board, as USD/JPY topped the 110 level for the first time in five days. The Aussie also staged a comeback and battled the 0.67 handle while NZD/USD cheered the upbeat comments from the Reserve Bank of New Zealand (RBNZ), Governor Orr, amid improved risk tones.

Meanwhile, USD/CAD kept its overnight range trade intact around mid-1.32s just as the cable held onto the 1.30 barrier. EUR/USD, however, attempted an anemic bounce above 1.0800 from multi-year lows amid broad US dollar retreat. Despite the upside attempts, the bearish bias remains in place for the shared currency.

On commodity markets, gold prices on Comex consolidated near a six-week high of $1608.15 while oil prices (on NYMEX) jumped nearly 1% ahead of the US weekly crude supply report.

Main Topics in Asia

RBNZ: Both the economy and monetary policy are in a good position

British prime minister again displays a cosiness with Beijing – SCMP

China's Hubei province, epicentre of coronavirus outbreak, reports 1,693 new cases on Feb 18 vs 1,807 on Feb 17

WHO urges calm as China virus death toll reaches 2,000 – AFP

China’s NHC reports 1,749 new confirmed cases of coronavirus, 136 new deaths - Xinhua

Moody's says credit conditions in Asia will turn negative in 2020

S. Korea confirms 15 new coronavirus cases, Hong Kong reports 2nd death

Singapore’s FinMin Heng: SGD exchange rate has sufficient band to move as appropriate

S&P: Coronavirus will deliver a short-term blow to China’s Q1 economic growth

Sources: Japan govt to maintain view that economy is recovering despite virus risks - Reuters

China dumps US Treasuries for the sixth straight month in December

US Pres. Trump casts doubts over India trade deal ahead of visit

Key Focus Ahead       

The main highlight in Wednesday’s EUR macro calendar is likely to be the UK Consumer Price Index (CPI) for January, due at 0930 GMT, with both the annualized headline and core figures seen accelerating while on a monthly basis, the CPI is likely to report deflation.

Also, in focus will remain the Eurozone Current Account and Construction Output data due later in the European trading. The Brexit-related headlines will be also eyed for fresh trading incentives.

The NA session offers a slew of US macro releases, including the Building Permits, Housing Starts, Producer Price Index (PPI), all of which will drop in at 1330 GMT. At the same time, the Canadian CPI data will be released.

Apart from the data and coronavirus-related updates, the speeches by the US Federal Reserve (Fed) officials Mester, Kaplan and Kashkari will remain in focus ahead of the key FOMC January meeting’s minutes, slated for release at 1900 GMT. Later in the American afternoon, the American Petroleum Institute’s (API) weekly Crude Stocks data will be published at 2130 GMT, soon followed by New Zealand’s PPI data release.

EUR/USD: Investors add bets to position for weakness in the Euro

EUR/USD is looking south and investors are adding bets to position for deeper losses in the common currency. The spot printed its worst daily close in nearly three years on Tuesday. Broader market sentiment and Eurozone data are likely to guide EUR/USD pair. 

GBP/USD awaits UK Consumer Price Index for fresh moves

GBP/USD clings to 1.3000 ahead of the London open on Wednesday. The cable has been in a 10-pip choppy range between 1.2995 and 1.3005 since the start of the Asian session. The reason to blame could be traced from the upcoming UK Consumer Price Index (CPI) data.

UK inflation preview: How CPI may finally break the pound's prowess

UK inflation figures for January are set to show a rebound to 1.6%. GBP/USD has shown resilience to weak wage figures and worrying Brexit headlines. Downbeat CPI figures may be a breaking point for the pound.

January FOMC Minutes Preview: The economic comparisons accumulate

Unanimous vote for stable policy at January 28-29 meeting. Powell testimony in Congress lauds economy, labor market. Dollar stronger on economic comparison European Union.

GMT
Event
Vol.
Actual
Consensus
Previous
Monday, Feb 17
24h
 
 
24h
 
 
24h
 
 
Tuesday, Feb 18
24h
 
 
Wednesday, Feb 19
08:00
 
 
09:00
 
€36.4B
€33.9B
09:00
 
€42.4B
€36.6B
09:30
 
-0.6%
0.3%
09:30
 
2.6%
2.2%
09:30
 
1.8%
2.2%
09:30
 
1.0%
0.9%
09:30
 
0.1%
-0.1%
09:30
 
0.1%
0.0%
09:30
 
-0.4%
-0.1%
09:30
 
1.0%
0.9%
09:30
 
-0.4%
0.1%
09:30
 
1.5%
1.4%
09:30
 
1.6%
1.3%
09:30
 
-0.4%
0.0%
n/a
 
1.4%
1.4%
n/a
 
 
0.73%
n/a
 
 
0.31%
12:00
 
 
1.1%
13:30
 
1.425M
1.608M
13:30
 
1.450M
1.420M Revised from 1.416M
13:30
 
-0.1%
-3.7% Revised from -3.9%
13:30
 
-30.7%
16.9%
13:30
 
0.1%
0.2% Revised from 0.1%
13:30
 
1.6%
1.3%

 

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 Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD: On the backfoot below 1.0100 amid notable USD demand

EUR/USD: On the backfoot below 1.0100 amid notable USD demand

EUR/USD is trading on the defensive below 1.0100, as the US dollar extends the previous rally amid risk-aversion. Fears of German recession, geopolitical concerns and hawkish Fedspeak weigh on the major currency pair.

EUR/USD News

GBP/USD remains vulnerable near 1.1900 after mixed UK Retail Sales

GBP/USD remains vulnerable near 1.1900 after mixed UK Retail Sales

GBP/USD is off the lows but remains vulnerable near 1.1900 amid mixed UK Retail Sales and broad USD strength. The UK Retail Sales surprised positively, with a 0.3% rise MoM in July. On an annualized basis, UK consumer spending fell 3.4% vs. 3.3% expected. 

GBP/USD News

Gold: Firmer DXY directs bears towards $1,730

Gold: Firmer DXY directs bears towards $1,730

Gold price takes offers to renew monthly low near $1,750 during early Friday morning in Europe. The bullion prices register the five-day downtrend as the US dollar bulls cheer recession woes, as well as firmer US data and hopes of the Fed’s aggression vis-à-vis rate hikes.

Gold News

AVAX price will give holders an opportunity to get out before another 20% crash

AVAX price will give holders an opportunity to get out before another 20% crash

AVAX price is in a tough spot as it approaches the end of its uptrend that has been ongoing for two months. While bearish as the altcoin looks, a minor relief rally or bounce could help investors cash out before another leg down. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures