FX Today was offered some relief in Thursday’s Asian trading, as the US dollar resumed its corrective downside, having ignored upbeat remarks from the Fed Chair Powell. The USD/JPY pair also faded the bounce and fell back to the midpoint of the 113 handle amid a cautious tone prevalent across the Asian markets, as markets weigh in the Brexit deal optimism ahead of the clearance from the British parliament.
The Aussie was the top performer, benefitting from another stellar Australian jobs report while the Kiwi followed suit and reclaimed the 0.68 handle, with the advance limited by negative tone around oil prices. Meanwhile, gold prices on Comex caught a fresh bid wave and jumped above the 1210 level, despite a minor bounce in the US Treasury yields across the curve.
The Euro traded firmer near 1.1350 region, tracking the gains in the Cable on hopes that a Brexit deal will be soon clinched, especially after the UK Cabinet approved the Brexit draft agreement late-Wednesday.
Main Topics in Asia
Federal Reserve's Powell speaking: All meetings are live
DUP: UK's Brexit deal "appalling" to many - Reuters
Aussie Unemployment holding near lows at 5.0%, Participation rising faster than expected into 65.6%
Oil struggling near lows, bulls hopeful on Middle East supply cuts
RBA’s Debelle: Curbs on lending have improved the resilience of the economy
US Govt Sources: China sends written response to US trade reform demands - Reuters
Gold: Flat lined in Asia after a strong bounce from key trendline support
US VP Pence: No meeting with Chinese officials on the agenda at the moment
Moody's: China's efforts to deleverage and de-risk its economy are slowing
Key Focus Ahead
Today’s EUR macro calendar remains eventful, with plenty of event risks against the back drop of the recent Brexit deal optimism. Markets brace for the UK retail sales data that will drop in at 0930 GMT and are likely to bounce to 0.2% on a monthly basis while staying flat annually. Also, of relevance remains the Eurozone trade balance figures due at 1000 GMT, followed by a slew of speeches by the ECB and BOE policymakers.
In the NA session, the US retail sales and Philly Fed manufacturing index will headline, due at 1330 GMT, among other minority reports while the Canadian ADP employment change report will be also published at 1330 GMT. At 1600 GMT, the EIA weekly fuel stocks data will be released, immediately followed by the Fed Chair Powell’s speech in Dallas while the New Zealand business PMI numbers at 2130 GMT will wrap up Thursday’s NY calendar.
EUR/USD: chipping away at 200-hour EMA, focus on Brexit news & GBP
The recovery rally in the EUR/USD gathered pace in Asia as the US treasury yields remained unchanged despite upbeat comments from Fed's Powell. An above-forecast US retail sales could lift the Treasury yields, pushing the US dollar higher across the board.
GBP/USD determined to hold 1.3000 as Brexit roils markets
The GBP/USD has found itself chained to the 1.3000 major handle as Brexit headlines continue to drag the Sterling up and down the charts. Thursday's UK data docket is relatively sparse compared to recent days, with UK Retail Sales due at 09:30 GMT.
UK Oct retail sales: Expect a muted 0.3% m/m rise - HSBC
Analysts at HSBC Bank offer a brief preview of Wednesday’s UK retail sales report that will drop in at 0930 GMT.
US: Core retail sales to drop 0.2% m/m in October - Barclays
The Barclays Research Team offer their expectations on today’s US retail sales report slated for release at 1330 GMT, with the core figures likely to be in the spotlight.
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