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Forex Today: Yuan sold-off as trade war fears heightened, a light session ahead

Dhwani Mehta FXStreet

Trade war fears intensified in Asia this Friday, which eventually turned into a currency-war, with the Yuan accelerating its declines versus its American peer. USD/CNY jumped to fresh one-year highs at 6.8117, before retreating below the 6.8 handle amid reports of intervention. The Indian Rupee headed towards the record low of 69.24/ US dollar while the Antipodeans, proxies for the Chinese economy, also felt the heat of the Yuan sell-off. However, the Antipodeans staged a solid comeback towards Asia closing, as the US dollar stalled its pullback from the Trump-led selloff.

Meanwhile, the Yen advanced further versus the greenback and looks to test the 112 level, as markets cheer uptick in the Japanese national core CPI figures while negative Asian equities also spurred the demand for the safe-haven currency. Gold prices on Comex attempted a bounce above $ 1220 levels while both crude benchmarks stabilized, but remained on track for their third weekly loss.

Main topics in Asia

German Finance Ministry sees threats to economic growth on the rise

Germany's Finance Ministry has released their July monthly report, and the ministerial group has highlighted that growing threats from protectionism and Brexit are set to hamper growth looking forward.

EU, Mexico auto makers slam Trump's autos tariffs plan - Reuters

According to Reuters, The Trump administration came under fire on Thursday from foreign automobile companies as the US considers its options on imposing a hefty 25% tariff on foreign autos.

PBOC devalues Yuan by most since June 2016

A weaker Yuan is China's answer to Trump's trade war.

USD/CNY hits fresh one-year high above 6.80 as trade war turns into currency war

The People’s Bank of China (PBOC) is increasingly favoring a weaker currency as it would help the economy absorb shocks from trade war with the US.

Major state-owned Chinese banks intervened in Yuan market

As the Chinese Yuan extends the sell-off versus its American counterpart, traders are reporting about the intervention by the state-owned banks.

USD/INR Technical Analysis: Hourly chart favors a minor pullback

USD/INR could be in for a minor pullback, having closed above 69.00 for the first time ever.

Key Focus ahead

Heading into Europe, we have a thin showing on the macroeconomic front on the final trading day of this week. In absence of the first-tier economic releases, the German PPI and Eurozone current account data will keep the EUR, GBP traders busy ahead of the UK public sector net borrowing data due at 0830 GMT.

The NA session is likely to be eventful, with the inflation and retail sales reports slated for release from Canada. Meanwhile, the US docket remains data-empty and hence, the broader market sentiment amid ongoing trade war concerns will continue to drive the fx markets.

Markets look forward to the Bakers Hughes US oil rigs count data due later at 1700 GMT for fresh direction on oil prices.

EUR/USD: Indecisive market amid rising fears of currency wars

No first tier data are scheduled for release in Europe and US, hence, the pair is at the mercy of the broader market sentiment.

GBP/USD cycling around 1.30 after Thursday's last-minute bounce does little to buck the trend

This week has been a poor run for the GBP/USD, which is struggling to hang onto the 1.3000 major handle heading into the brunt of Friday's trading.

Canadian double-feature Friday preview: Contradicting expectations lay the ground for a choppy reaction

Canadian Inflation figures for June and Retail Sales for May are published simultaneously on Friday, July 20th, at 12:30 GMT. There are no parallel US publications, leaving the stage for these figures to move the USD/CAD.

US dollar to weaken in ‘coming weeks’ – Morgan Stanley

Analysts at Morgan Stanley offer their outlook on the G10 currencies, centered on the Euro, US dollar, Yen and Yuan, in its latest client note released on Friday.

GMT	Event	Actual	Consensus	Previous
Thursday, Jul 19
23:30	JPY National CPI Ex Food, Energy (YoY)	0.2%	0.4%	0.3%
23:30	JPY National CPI Ex-Fresh Food (YoY)	0.8%	0.8%	0.7%
23:50	JPY Foreign bond investment	¥-5.6B		¥818.9B Revised from ¥817.9B
23:50	JPY Foreign investment in Japan stocks	¥601.4B		¥76.0B Revised from ¥74.3B
Friday, Jul 20
24h	USD OPEC meeting
24h	COP Independence Day
03:00	NZD Credit Card Spending (YoY)	5.7%		3.7%
04:30	JPY All Industry Activity Index (MoM)	0.1%	0.0%	1.0%
04:30	EUR Consumer Confidence Adj	23		23
04:30	EUR Consumer Spending Volume	1.9%		2.9% Revised from 3.0%
06:00	EUR Producer Price Index (YoY)		2.9%	2.7%
06:00	EUR Producer Price Index (MoM)		0.3%	0.5%
07:00	HUF Gross Wages (YoY)			12.6%
08:00	PLN Retail Sales (YoY)			7.6%
08:00	EUR Current Account n.s.a			€26.2B
08:00	EUR Current Account s.a		€27.2B	€28.4B
08:30	GBP Public Sector Net Borrowing		£3.500B	£3.356B
09:00	EUR Unemployment Rate			5.4%
11:30	INR FX Reserves, USD			$405.81B
12:00	BRL Mid-month Inflation			1.11%
n/a	GBP NIESR GDP Estimate (3M)		0.3%	0.2%
12:30	CAD Retail Sales ex Autos (MoM)		0.5%	-0.1%
12:30	CAD Retail Sales (MoM)		0.0%	-1.2%
12:30	CAD Consumer Price Index (MoM)		0.1%	0.1%
12:30	CAD Consumer Price Index - Core (MoM)		0.3%	-0.1%
12:30	CAD Consumer Price Index (YoY)		2.4%	2.2%
12:30	CAD Bank of Canada Consumer Price Index Core (MoM)		0.3%	-0.1%
12:30	CAD Bank of Canada Consumer Price Index Core (YoY)		1.4%	1.3%
13:00	MXN Jobless Rate s.a			3.2%
13:00	MXN Jobless Rate			3.2%
13:00	EUR Consumer Confidence Index			-3
17:00	USD Baker Hughes US Oil Rig Count			863
19:30	USD CFTC Oil NC net positions			654.5K
19:30	USD CFTC Gold NC net positions			$81.4K
19:30	USD CFTC USD NC net positions			$172K
19:30	GBP CFTC GBP NC net positions			£-40.4K
19:30	JPY CFTC JPY NC net positions			¥-39.8K
19:30	EUR CFTC EUR NC net positions			€24.4K
19:30	AUD CFTC AUD NC net positions			$-41K
Saturday, Jul 21
00:00	KRW Trade Balance
Monday, Jul 23
05:00	SGD Consumer Price Index (YoY)			0.4
06:00	DKK Consumer Confidence			10.6
07:00	TRY Consumer Confidence			70.3
08:30	EUR Current Account (YoY)			€-1.344B
08:30	HKD Consumer Price Index			2.1%
09:00	ISK Consumer Price Index (MoM)			0.6%
09:00	ISK Consumer Price Index (YoY)			2.6%
n/a	EUR German Buba Monthly Report
10:00	EUR Retail Sales (MoM)			0.1%
10:00	EUR Retail Sales (YoY)			4.3%
12:00	PLN M3 Money Supply (YoY)			5.7%
12:30	USD Chicago Fed National Activity Index			-0.15
12:30	CAD Wholesale Sales (MoM)			0.1%
14:00	USD Existing Home Sales (MoM)		5.49M	5.43M
14:00	USD Existing Home Sales Change (MoM)		1.5%	-0.4%
14:00	EUR Consumer Confidence			-0.5
15:30	USD 3-Month Bill Auction			1.98%
15:30	USD 6-Month Bill Auction			2.14%
Tuesday, Jul 24
00:30	JPY Nikkei Manufacturing PMI			53
05:00	JPY Leading Economic Index		106.9	106.9
05:00	JPY Coincident Index		116.1	116.1
06:00	EUR Producer Price Index (YoY)			4.9%
06:00	EUR Unemployment Rate			7.6%
06:45	EUR Business Climate			110
07:00	EUR Markit Services PMI		54.3	55.9
07:00	EUR Markit Manufacturing PMI		53.9	52.5
07:00	EUR Markit PMI Composite		54.2	55.0
07:30	EUR Markit PMI Composite		53.4	54.8
07:30	EUR Markit Services PMI			54.5
07:30	EUR Markit Manufacturing PMI		56.2	55.9
08:00	EUR Trade Balance non-EU			€2.37B
08:00	PLN Unemployment (MoM)			6.1%
08:00	EUR Markit Manufacturing PMI		55.0	54.9
08:00	EUR Markit Services PMI		53.7	55.2
08:00	EUR Markit PMI Composite		53.9	54.9
10:00	GBP CBI Industrial Trends Survey - Orders (MoM)			13
11:00	TRY TCMB Interest Rate Decision			17.75%
12:00	HUF MNB Interest Rate Decision			0.9%
12:55	USD Redbook index (YoY)			3.3%
12:55	USD Redbook index (MoM)			0.1%
13:00	USD Housing Price Index (MoM)			0.1%
13:45	USD Markit Manufacturing PMI		55.5	55.4
13:45	USD Markit PMI Composite			56.2
13:45	USD Markit Services PMI		56.3	56.5
14:00	USD Richmond Fed Manufacturing Index			20
14:00	MXN 1st half-month Inflation			0.13%
14:00	MXN 1st half-month Core Inflation			0.08%
15:30	USD 4-Week Bill Auction			1.88%
17:00	USD 2-Year Note Auction			2.538%
20:30	USD API Weekly Crude Oil Stock			0.629M
21:00	KRW Consumer Sentiment Index			106
22:00	CLP BCCH Interest Rate			2.5%
22:45	NZD Trade Balance (MoM)			$294M
22:45	NZD Exports			$5.42B
22:45	NZD Trade Balance (YoY)			$-3.6B
22:45	NZD Imports			$5.12B
Wednesday, Jul 25
01:30	AUD RBA trimmed mean CPI (QoQ)			0.5%
01:30	AUD Consumer Price Index (YoY)			1.9%
01:30	AUD Consumer Price Index (QoQ)			0.4%
01:30	AUD RBA trimmed mean CPI (YoY)			1.9%
06:00	DKK Industrial Outlook			2
06:45	EUR Producer Prices (MoM)			0.6%
07:00	HUF Unemployment Rate (3M)			3.7%
07:30	SEK Producer Price Index (YoY)			6.3%
07:30	SEK Producer Price Index (MoM)			1.4%
08:00	EUR IFO - Business Climate			101.8
08:00	EUR IFO - Current Assessment			105.1
08:00	EUR IFO - Expectations			98.6
08:00	EUR Private loans (YoY)			2.9%
08:00	EUR M3 Money Supply (3m)			3.9%
08:00	EUR M3 Money Supply (YoY)		3.8%	4.0%
08:00	CHF ZEW Survey - Expectations			8
08:30	GBP BBA Mortgage Approvals			39.244K
10:00	GBP CBI Distributive Trades Survey - Realized (MoM)			32%
11:00	USD MBA Mortgage Applications			-2.5%
11:30	TRY Manufacturing Confidence			104.6
11:30	TRY Capacity Utilization			78.3%
13:00	MXN Retail Sales (MoM)			-1.1%
13:00	MXN Retail Sales (YoY)			3.3%
13:00	EUR Leading Indicator			0.6
13:30	BRL Current Account			$0.729B
14:00	USD New Home Sales (MoM)			0.689M
14:00	USD New Home Sales Change (MoM)		0.7%	6.7%
14:30	USD EIA Crude Oil Stocks change			5.836M
17:00	USD 5-Year Note Auction			2.719%
19:00	ARS Trade Balance (MoM)			$-1M
23:00	KRW Gross Domestic Product Growth (YoY)			2.8%
23:00	KRW Gross Domestic Product Growth (QoQ)			1%
23:50	JPY Foreign bond investment			¥-5.6B
23:50	JPY Foreign investment in Japan stocks			¥601.4B
Thursday, Jul 26
01:30	AUD Export Price Index (QoQ)			4.9%
01:30	AUD Import Price Index (QoQ)			2.1%
02:30	SGD Unemployment rate			2%
05:00	SGD Industrial Production (YoY)			11.1%
05:00	SGD Industrial Production (MoM)			0.4%
06:00	EUR Gfk Consumer Confidence Survey		10.6	10.7
06:00	DKK Retail Sales (YoY)			3.9%
06:45	EUR Consumer Confidence			97
07:00	TRY Economic confidence index			90.4
07:00	EUR Unemployment Survey			16.74%
07:00	NOK Labour Force Survey			3.7%
07:30	SEK Unemployment Rate			6.5%
08:00	EUR Business Confidence			106.9
08:00	EUR Consumer Confidence			116.2
08:00	SEK Consumer Confidence (MoM)			96.8
n/a	EUR 5-y Bond Auction			0.336%
n/a	EUR 10-y Obligaciones Auction			1.406%
09:30	ZAR Producer Price Index (YoY)			4.6%
09:30	ZAR Producer Price Index (MoM)			0.7%
n/a	EUR 10-y Bond Auction	0.67%		0.90%
11:45	EUR ECB Deposit Rate Decision			-0.4%
11:45	EUR ECB Interest Rate Decision			0%
12:30	USD Continuing Jobless Claims			1.751M
12:30	USD Initial Jobless Claims			207K
12:30	USD Wholesale Inventories			0.6%
12:30	USD Goods Trade Balance			$-64.85B
12:30	USD Durable Goods Orders		1.1%	-0.6%
12:30	USD Durable Goods Orders ex Transportation		0.3%	-0.3%
12:30	EUR ECB Monetary policy statement and press conference
13:00	RUB Central Bank Reserves $			$460.3B
14:30	USD EIA Natural Gas Storage change			46B
15:00	USD Kansas Fed manufacturing activity			38
17:00	USD 7-Year Note Auction			2.809%
23:30	JPY Tokyo Consumer Price Index (YoY)			0.6%
23:30	JPY Tokyo CPI ex Fresh Food (YoY)		0.6%	0.7%
23:30	JPY Tokyo CPI ex Food, Energy (YoY)			0.4%
Friday, Jul 27
01:30	AUD Producer Price Index (QoQ)			0.5%
01:30	AUD Producer Price Index (YoY)			1.7%

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.

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