Despite the risk-off sentiment induced by the sell-off in the Asian equities and oil prices, the Japanese currency was heavily offered, as optimistic comments from the North Korean leader Kim Jong-Un about denuclearization of the Korean Peninsula revived hopes of the peace talks between the US and N. Korea. Meanwhile, the US dollar traded broadly flat around the 89 handle, as investors await the US Q4 final GDP figures for fresh impetus.
The pound was the top gainer on the back of the reports from The Times, citing that the UK is ready to seek a fresh solution to the Irish border issue. The Antipodeans traded mixed, with the Aussie underpinned by optimism over the US-China trade talks while the Kiwi remained better offered, unimpressed by the NZ ANZ business confidence numbers.
Main topics in Asia
A Bloomberg report quotes China as saying that North Korea's Kim Jong Un met with President Xi Jinping on a surprise visit to Beijing and reportedly told the Chinese leader that he was committed to denuclearization of the Korean peninsula and was willing to hold a summit with the US.
According to reporting by Reuters, the US and South Korea have added a side deal to the KORUS update pact that the countries plan to sign into action at some point in the near future, though the exact details have not been released yet.
Bloomberg quoted "four people with knowledge of the proposal in the overnight trades, citing that the US President Trump's administration is considering banning Chinese investments in technologies.
Following the headlines from Bloomberg, citing that the North Korean Leader Kim Jong Un is scheduled to have a summit with South Korean President Moon Jae-in in April and may meet US President Donald Trump before the end of May.
The UK’s Times quoted unnamed sources, as saying that “officials have been promised concrete details on what alternative plans the UK government has, beyond the so-called backstop plan.”
According to the quarterly survey of thousands of Chinese firms by China Beige Book International (CBB), China’s economic activity remained strong in Q1 2018, but the outlook looked cloudy.
Key Focus ahead
The EUR, GBP traders gear up for another light session ahead, with the German Gfk consumer climate figures due on the cards pre-Europe open. The Swiss Credit Suisse Economic Expectations and the UK CBI realized sales data will be reported later in the European session.
The main markets moving event for today is expected to be the US Q4 2017 GDP revision among other macro releases, including the goods trade balance, pending home sales and EIA crude inventories report. Meanwhile, the USD traders will also pay close attention to the speech by the Atlanta Fed President Bostic’s comments. Bostic is due to speak at the Atlanta Society of Finance and Investment Professionals luncheon.
Despite the pullback, the immediate outlook remains bullish as suggested by the bullish momentum studies - 5, 10, and 21 DMAs are trending higher, indicating a bullish setup. As for today, the common currency may drop against the greenback if the US Q4 GDP is revised higher.
The macro calendar is a thin affair for Wednesday's session except for US GDP figures at 12:30 GMT, which are expected to clock in at 2.7% versus the previous figure's 2.6%.
The short trading week in North American markets leading up to the Easter holiday has been positive for the US currency ahead of the release of the final GDP for the fourth quarter.
The Reserve Bank of Australia (RBA) would stand pat at its policy meeting next week and is seen holding rates unchanged at record low of 1.75 percent until end 2018, a Reuters poll of economists showed.
Having failed to beat a key resistance at $7,131, copper looks set to drop to $6,056 per tonne on the London Metal Exchange (LME) in three months, according to Reuters technical report.
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