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Forex Today in Asia was once again characterized by ongoing Yuan sell-off, which sent the Antipodeans lower while the Aussie suffered the most, weighed further by a miss on the Australian CPI numbers. The Kiwi fell back below the 0.68 handle after the New Zealand trade report surprised markets to the downside. Meanwhile, the USD/JPY pair defended gains amid higher Japanese stocks and 2-year Treasury yields.

Among other related markets, the Asian equities traded higher, except for the Australian markets. Both crude benchmarks traded with moderate gains while gold prices on Comex were modestly flat near $ 1225 levels.

Main topics in Asia

US President Trump’s letter to incoming Mexico president Obrador

According to statements made by Mexico’s new foreign minister, incoming Mexican President Lopez Obrador received a letter from US  President Donald Trump, which outlined a press for quick NAFTA renegotiations.

German Foreign Minister Maas: Britian needs to move on Brexit talks

Germany’s Foreign Minister Heiko Maas addressed the UK’s need to get a move on with Brexit talks in a meaningful way during a media interview.

Trump tweets a call for free trade with the EU

US  President Donald Trump  took to Twitter late Tuesday to issue a call for the European Union and the United States to drop all trade barriers and tariffs with each other in order to encourage free trade between the two economies.

Australia’s Q2 CPI steadies at 0.4% q/q, misses estimates

Following the below expectations  Australia’s  Q1 2018 CPI  readings, today’s inflation figures for the Q2  showed a mixed picture, with the headline figures missing expectations.

BoJ left JGB purchases unchanged

At its routine adjustment today, the Bank of Japan (BoJ) made no changes to its Japanese government  bonds  (JGBs) purchases amount.

PBOC sets USD/ CNY central rate at 6.8040 vs. 6.7891 previous

On Wednesday, the People’s Bank of China (PBOC) set the USD/CNY reference rate at 6.8040 versus 6.7891 Tuesday’s close, the weakest since June-end 2017.

Key Focus ahead

Today’s macro calendar looks quite busy, with the German Ifo business surveys dropping in at 0800 GMT alongside the Eurozone M3 money supply and private loans data for the month of June. From the UK docket, the high street lending data, BBA mortgage approvals and Confederation of British Industry (CBI) realized sales figures will be released later in the European session.

In the NA session, the US new home sales and EIA crude oil stockpiles data will be reported. However, the main event risk for today remains the trade talks between the European Commission President Juncker and the US President Trump due later on Wednesday.

EUR/USD sold-off at 1.1700 ahead of Ifo, Juncker-Trump trade talks

EUR/USD  faced rejection once again just below the 1.17 handle in the Asian, as the bulls remain wary heading into the German Ifo business surveys and EU-US trade talks due later today.

GBP/USD back near 1.3150 as PM May takes over Brexit negotiations

Wednesday’s calendar for the GBP/USD is on the thin side for both the Sterling and the Greenback, with BBA Mortgage Approvals at 08:30 GMT and CBI Distributive Trades Survey at 10:00 GMT, both low-tier indicators for the UK.

Stages of Brexit deal

Brexit headlines filled the  news  in the last couple of weeks as Brexit negotiations seem to go nowhere and the UK Prime Minister was under increased pressure from both Conservative party members of the UK parliament as well as from the EU.

US New home sales coming up: likely declined 3.0% – Nomura

Analysts at Nomura noted the next key data release for the US as we build up towards Friday’s GDP report.  

What’s driving the dollar?

After last week’s 12-month high in the dollar index, you might wonder who or what cut short the rally.   The dollar index has stalled this week and is down some 100 pips from  Friday’s  high.