Forex today saw lackluster trading for the second straight day in Asia, as most majors stuck to tight trading ranges amid a light calendar and ongoing geopolitical and trade tensions, involving the US, Iran and China.
Among the Asia-pac currencies, the USD/JPY pair almost reversed yesterday’s bounce, as the Yen tracked the Yuan recovery while upbeat Japanese wage growth data also offered further impetus to the JPY bulls. Both the Antipodeans traded modestly flat, with the Aussie having touched the 0.74 handle on the Reserve Bank of Australia’s status quo. The Kiwi traded on the back foot, despite a rally in China stocks and positive oil prices. Meanwhile, the EUR, GBP, CHF and CAD remained largely unchanged heading into a quite EUR calendar.
Main topics in Asia
US renews sanctions on Iran, calls for talks get rebuffed – Reuters
Iran has coolly rebuffed suggestions to engage in talks by the US’ national security advisor Michael Bolton while renewed sanctions against Iran after the US withdrawal from the Iranian nuclear accord.
USD/TRY: Turkey’s Lira has firmed to 5.2625 – Turkish delegation going to Washington
Turkey’s Lira has firmed to 5.2625 against the greenback after reports of a Turkish delegation going to Washington.
Canada refusing to back down on human rights with Saudi Arabia – Reuters
As reported by Reuters, Canada is refusing to back down against Saudi Arabia, who recently froze trade and investment within Canada and expelled their ambassador from Riyadh after Ottawa called on Saudi Arabia to free their imprisoned civil activists.
USD/CNH: Bounce from rising trendline keeps bulls in the game
The USD/CNH pair defended the rising trendline (drawn from the June 14 low and July 10 low) on Monday, keeping the bulls in the game.
China Press: Trump’s claims of winning trade war are ‘wishful thinking’ – Reuters
Reuters reports a commentary carried in a Chinese state newspaper, China Daily, which described as “wishful thinking” US President Trump’s belief that a fall in Chinese stocks was a sign of his winning the trade war and an example of his “ability to elasticize the truth.”
China sees current account deficit in H1 – Xinhua News Agency
China registered a current account deficit of USD 28.3 billion in the January-June period, the State Administration of Foreign Exchange (SAFE) said Monday in an online statement, according to Xinhua News Agency.
Reserve Bank of Australia leaves cash rate unchanged at 1.50%
The Reserve Bank of Australia (RBA) at its monetary policy meeting held today, kept the official cash rate (OCR) on hold at a record low of 1.50 percent for the twenty-second meeting in a row.
Key Focus ahead
Today’s EUR calendar remains data-dry amid a lack of first-tier macro news, with the only second-liner Halifax HPI release from the UK docket, due at 0730 GMT, to offer some impetus to the EUR, GBP traders. Ahead of the European session, a slew of German economic data will be released, all at once at 0600 GMT, including the trade balance, current account and industrial production.
Moving on, the NA session also sees little action amid the Canadian Ivey PMI and US JOLTS job openings data that will drop in at 1400 GMT, followed by New Zealand’s fortnightly dairy auction results due around 1500 GMT. Also, in focus will remain the American Petroleum Institute’s (API) crude inventories report slated for release at 2030 GMT.
EUR/USD: Put value at 7-week high, focus on German industrial production
The demand for the EUR put options has risen sharply in the last few days. The immediate support at 1.15 could be put to test today if the German industrial production prints below the forecast of a 0.5 percent month-on-month drop.
GBP/USD sets a new low for 2018, on pace for further declines
Little meaningful data exists on the calendar today for the GBP/USD, and traders will be forced to face the full brunt of bearish Brexit winds; monthly and quarterly Halifax Housing Prices are due at 07:30 GMT.
‘Stay long JPY’ on trade tensions, policy threats and actions – JP Morgan
Analysts at JP Morgan argued to stay long on the Yen, citing two main reasons in its latest client note.
JOLTS preview: labor market remains less fluid – Nomura
Analysts at Nomura offered a preview of the next key jobs data from the US coming up tonight.
China July trade balance preview – Nomura
China’s trade balance figures are due out this Wednesday, with Nomura’s analysts expecting the country’s export growth to decelerate last month amid escalating US-China trade dispute.
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