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Forex Today: Yuan slide dents risk, Antipodeans tank, eyes on US GDP

Forex Today experienced re-emergence of the risk-off sentiment in Asia this Friday, as the Yuan’s weakness added to ongoing market woes and dragged the risk assets sharply lower. The Asian equities and the US indices futures stalled the bounce and resumed the recent sell-off while oil prices also extended the drop, as global growth concerns, US-China trade tensions and European political uncertainty continue curb risk.

The AUD/USD fell to the lowest levels since Feb 2016 near 0.7020 level while the Kiwi dropped -0.90% to 0.6470, 2-week lows. The safe-haven Yen also picked up a bid and pushed the USD/JPY lower towards the 112 handle. Gold traded better bid near 1235 levels, not benefiting from heightened risk-aversion. Both the EUR and GBP traded on the back foot, as the US dollar index traded near YTD highs.

Main Topics in Asia

Tokyo headline CPI comes in at 1.5% with mixed results

Fed’s Mester: US policy still accommodative, need to hike to neutral territory

China considers further tax cuts and potential VAT adjustment

NSIER: A no deal Brexit seen shaving 1.6 points off UK growth in 2019

China cuts Iran oil purchases ahead of US sanctions – WSJ

S&P 500 futures down nearly 1 percent as the Chinese yuan eyes 10-year lows

China and Japan sign agreement toward establishment of Yuan clearing bank

USD/CNH Technical Analysis: Eyes 7.00, PBOC fix likely bolstered the bullish chart setup

Key Focus ahead

We have a data-empty EUR calendar, as the dust settles over the ECB aftermath and markets digest the latest Brexit headlines, with the Brexit talks on hold, as the UK PM Mays team refused to agree on any plan. All eyes remain on the US Q3 GDP report alongside the release of the core PCE price index and a few minority reports for fresh US dollar trades. Also, in focus remains the speech by the ECB President Draghi, as markets await further insights on the central bank’s monetary policy.

EUR/USD: Weakness could accentuate on CNY slide, focus on US GDP

A below-forecast GDP reading would be USD-negative, still, the gains in the EUR/USD may be limited as a sharp slowdown in the world's biggest economy may not bode well for the already risk-averse equities.

GBP/USD to face further Brexit pressure ahead of US GDP figures

The economic calendar leaves the GBP completely unrepresented, and the Cable will be seeing market sentiment holding the reigns to end the week's trading, though US Preliminary GDP figures due at 12:30 GMT today will no doubt see plenty of Greenback-based action …

US GDP Preview - 4% Here We Come?

The US Department of Commerce will release its first estimate of the annualized gross domestic product for the third quarter on Friday, October 26th at 12:30 GMT, 8:30 am EDT. 

How to trade the US GDP with EUR/USD

The final release of US GDP is closely watched to see if the robust growth number is confirmed. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.

GMT
Event
Vol.
Actual
Consensus
Previous
Friday, Oct 26
06:00
 
10.5
10.6
12:30
 
2.1%
3.3%
12:30
 
3.3%
4.2%
12:30
 
2%
2%
12:30
 
1.8%
2.1%
14:00
 
99
99
14:00
 
 
14:15
 
 
17:00
 
 
873
19:30
 
 
$17.7K
19:30
 
 
493.2K
19:30
 
 
$226.8K
19:30
 
 
£-50.4K
19:30
 
 
¥-100.6K
19:30
 
 
€-29.3K
19:30
 
 
$-71.5K
Sunday, Oct 28
23:50
 
 
-0.1%
23:50
 
 
0.9%
23:50
 
2.1%
2.7%
Monday, Oct 29
n/a
 
 
09:30
 
 
£4B
09:30
 
 
£1.118B
09:30
 
 
66.44K
09:30
 
 
1.2%
09:30
 
 
0.2%

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.

More from Dhwani Mehta
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