Forex Today: Yen weaker, despite Abe’s big win, a light session ahead

Dhwani Mehta FXStreet

Forex today was mainly driven by risk-on flows, triggered by a strong Abe win in the Japanese elections, which sent the Nikkei to fresh two-decade highs. However, the Yen failed to benefit from Abe’s landslide victory, as the outcome was already priced-in by the markets, while persisting risk-on trades also added to the weight on the safe-haven Yen. Gold also lost ground and hit 2-week lows amid broad USD strength. Meanwhile, the Antipodeans remained better bid amid better risk sentiment and higher oil prices.

Main topics in Asia

JPY: Another landslide victory for Abe: more of a relief yen-cross rally to go? - Nomura

Analysts at Nomura noted that the snap election result saw the ruling coalition (the LDP and Komeito) achieve another landslide victory - According to NHK, as of 2:00am local time 10 seats are still unknown.

Gold hits 2-week lows as risk-on prevails at full steam

Gold futures on Comex meander near the lowest levels seen since Oct 6th on Monday, extending selling-off seen last Friday, as the yellow metal continues to face double whammy…

Nikkei clocks two-decade high as Abenomics prevails

Japan's benchmark equity index Nikkei jumped to a two-decade high of 21,712.9 as Yen weakened to a three-month low following Abe's win in the snap elections.

US to put nuclear bombers on high alert - UK Mirror

UK Mirror is reporting that US is preparing for nuclear war readiness amid North Korea crisis.

Key Focus ahead

Heading into Europe on Monday, the economic calendar has very little to offer, except for the German Buba monthly report and UK CBI industrial orders data. Meanwhile, the NA session also remains data-light, with only the Eurozone consumer confidence due to be reported.

Looking ahead, we have a busy week ahead, with the Eurozone flash manufacturing PMIs, Australian CPI report, UK and US GDP data due on the cards.

EUR/USD - Strong EUR call bias & vols pick up, eyes Catalan crisis & ECB

EUR/USD was offered at the 50-day moving average hurdle on Friday as renewed hopes of tax reform in the US put a bid under the US dollar. The currency pair fell to 1.1762 on Friday and extended losses to 1.1751 in Asia.

GBP/USD: Will the buyers retain control above 1.3200?

The GBP/USD pair gradually extends its bounce from a dip to 1.3170 levels and looks to take on the recent upmove beyond 1.32 handle, in the wake of broad USD correction.

ECB to announce extension of APP at lower pace of EUR30bn/ month - Barclays

Barclays’ Research Team out with its brief preview on what to expect from the ECB monetary policy meeting due later this Thursday.

The week ahead: a busy calendar, including ECB, US/ UK GDP, Aussie CPI- Nomura

Analysts at Nomura offered a preview of the week's key events.

GMT	Event	Consensus	Previous
Monday, Oct 23
10:00	EUR German Buba Monthly Report
10:00	GBP CBI Industrial Trends Survey - Orders (MoM)	13	7
12:30	USD Chicago Fed National Activity Index		-0.31
14:00	EUR Consumer Confidence	-1.0	-1.2
15:30	USD 3-Month Bill Auction		1.09%
15:30	USD 6-Month Bill Auction		1.24%
Tuesday, Oct 24
00:30	JPY Nikkei Manufacturing PMI		52.9
07:30	EUR Markit PMI Composite	57.7	57.7
07:30	EUR Markit Services PMI	55.6	55.6
07:30	EUR Markit Manufacturing PMI	60.0	60.6
08:00	EUR Markit Manufacturing PMI	57.8	58.1
08:00	EUR Markit Services PMI	55.9	55.8
08:00	EUR Markit PMI Composite	56.6	56.7
n/a	EUR 10-y Bond Auction		0.44%
12:55	USD Redbook index (YoY)		3.6%
12:55	USD Redbook index (MoM)		-1.4%
13:45	USD Markit Manufacturing PMI	53.5	53.1
13:45	USD Markit Services PMI		55.3
13:45	USD Markit PMI Composite		54.8
14:00	USD Richmond Fed Manufacturing Index		19
15:30	USD 4-Week Bill Auction		0.995%
17:00	USD 2-Year Note Auction		1.462%
20:30	USD API Weekly Crude Oil Stock		-7.13M
Wednesday, Oct 25
00:30	AUD RBA trimmed mean CPI (YoY)	2.0%	1.8%
00:30	AUD Consumer Price Index (QoQ)	0.8%	0.2%

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.

EUR/USD holds lower ground near 1.1850 ahead of EU/ US data

EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1850 in European trading on Friday. A broadly cautious market environment paired with modest US Dollar demand undermines the pair ahead of the Eurozone GDP second estimate and the critical US CPI data.

GBP/USD keeps losses around 1.3600, awaits US CPI for fresh impetus

GBP/USD holds moderate losses at around 1.3600 in the European session on Friday, though it lacks bearish conviction. The US Dollar remains supported amid softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold trims intraday gains to $5,000 as US inflation data loom

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains heading into the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.