Forex today was a quiet affair in Asia on the final trading day of the week, as the US dollar remained on the back foot across the board following no major breakthrough between the US and China on trade talks.
As a result, most majors attempted minor recoveries, with the EUR/USD pair heading back towards the 1.16 handle while the Aussie rallied nearly 50-pips as the Australian political tensions eased after Scott Morrison became the new Prime Minister. The Kiwi also remained bid near 0.6650 amid higher commodities’ prices while the Japanese Yen traded weaker versus its American counterpart just below the midpoint of the 111 handle.
Main topics in Asia
New Zealand trade deficit hit 9-year high in July
The New Zealand’s trade deficit in July widened to a 9-year high, courtesy of a sharp rise in petroleum imports.
China Commerce Ministry: China and US had a constructive exchange over trade issues
Comments from China’s commerce ministry are crossing the wires via Reuters “¦
US treasury yield curve flattest in 11 years
The spread between the 10-year and 2-year Treasury note has narrowed to tightest since the second third quarter of 2007.
Scott Morrison is the new Australian Prime Minister
Scott Morrison is the new Australian Prime Minister, according to ABC News.
White House: US-China trade talks end with no breakthrough as tariffs kick in – Reuters
White House spokeswoman Lindsay Walters said in a brief emailed statement on Friday, the US and Chinese negotiators ended two days of trade talks on Thursday with no major breakthrough.
Australia’s Turnbull: I was a reforming liberal Prime Minister
Malcolm Turnbull is on the wires now, via Reuters, speaking to the reporters now after being ousted as Australia’s prime minister by Former Treasurer Scott Morrison.
Key Focus ahead
Heading into Europe, the German second-quarter final GDP figures will drop in at 0600 GMT, which are expected to confirm the preliminary readings of 0.5% q/q and 2.3% y/y. From the UK docket, the BBA mortgage approvals data will be reported at 0830 GMT, which is expected to have virtually no impact on the GBP markets, as Brexit-related news and USD dynamics will remain the main drivers ahead of the US durable goods data slated for release at 1230 GMT. The US durable goods orders are expected to drop to -0.5% in July versus +0.8% booked in June.
However, the main focus today is on the day 2 of the Jackson Hole Economic policy Symposium, as the Fed Chair Powell’s speech titled “Monetary Policy in a Changing Economy” at 1400 GMT for fresh insights on further rate hike plans and US-China trade spat. Also, the speech by the BOE Chief Economist Haldane will be closely heard among other central bankers viz. BOC’s Poloz etc.
EUR/USD: Rally runs out of steam at 50-day MA ahead of Powell speech
The German second-quarter GDP, due for release at 06:00 GMT, and the US durable goods orders figure, scheduled for release at 12:30 GMT, may not have a big impact on the pair as investors are likely to stay on the sidelines ahead of Powell’s speech.
GBP/USD looks to stabilize above 1.2800, eyes US data, BOE Haldane
The GBP/USD pair tested bids once again at the 1.28 handle and managed to cling onto the last, now extending its downside consolidative mode, as we progress towards the European opening bells.
US Durable Goods Orders preview: activity seen easing in July
The US will release July Durable Goods Orders report this Thursday, a closely watched report amid it being an early indicator of future economic health.
How to trade the US Core Durable Goods Orders with EUR/USD
The US Durable Goods Orders is eyed by the Fed for investment trends and always moves the dollar.
Powell’s Jackson Hole Speech: Three topics to watch out for beyond the September hike
Fed Chair Jerome Powell will speak on Friday, August 24th, at the Jackson Hole, Wyoming, at the Kansas City Fed’s annual conference.
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