Forex Today: AUD/JPY – a big move in Asia as risk rebounds, ECB minutes, US inflation eyed

Forex Today breathed a sigh of relief in Asia this Thursday, with risk-recovery emerging the main theme, as the dust settled over the US-China trade war fears. AUD/JPY was the big mover, as USD/JPY continued its rally above the 112 handle, having clocked fresh six-month tops.

Meanwhile, the Aussie cheered the rebound in risk appetite as well as in commodities’ prices, especially copper.   The Kiwi remained better bid near daily tops of 0.6765 while both the Euro and pound traded modestly flat, as the US dollar extended its bullish consolidative mode in the Asian trades.

Main topics in Asia

White House officials hold discussions with China, open to more

White House officials have confirmed that they have held talks with China regarding trade, though details have been thin.

Japan’s Itoh: BoJ a long way away from reducing monetary policy easing

Motoshige Itoh, A member of the Japanese government’s economic and fiscal policy council, is hitting wires reaffirming Japan’s dedication to hyper-easy monetary policy.

Bank of Korea keeps rates unchanged, expects growth to slow

The South Korean Central Bank kept base rate unchanged at 1.5 percent as expected on Thursday and warned that economic growth could be slower than previously expected.  

BOK’s Lee: Recent fall in KRW is not excessive

Bank of Korea (BOK) Governor Lee is out on wires stating that recent fall in the South Korean Won (KRW) does not look excessive when compared to the slide seen in other emerging market currencies.  

Trade war could be “prolonged and spread” – South Korea’s Trade Minister

The comments from South Korea’s Trade Minister are crossing the wires via Reuters:

Key Focus ahead

The immediate focus now remains on the German final CPI release due at 0600 GMT, followed by the Eurozone industrial production data dropping in at 0900 GMT. From the UK docket, the Bank of England (BOE) credit conditions survey will be published, although it is likely to have little impact on the pound.

At 1130 GMT, The European Central Bank (ECB) June monetary policy meeting minutes will be released, which is unlikely to throw any surprises. At its June 14th monetary policy meeting, the ECB announced a halving of its bond-buying scheme to a rate of €15 billion in Q4 2018 and an end to purchases from 2019.

Moving on, the NA session will be quite eventful, with the key US inflation report on the cards at 1230 GMT alongside the release of the weekly jobless claims. Also, in focus remains the speeches by the FOMC members Kashkari and Harker for further impetus on the US dollar trades,

EUR/USD: Corrective rally faltered ahead of US CPI release

The EUR/USD’s corrective rally faltered on Wednesday and the pair could revisit recent lows near 1.15 should the US inflation numbers, scheduled for release at 12:30 GMT, beat estimates.

GBP/USD softens into 1.32 ahead of US CPI numbers as Brexit weighs

This Thursday is expected to see the UK’s latest White Paper on Brexit, which will unveil the full details of Prime Minister Theresa May’s latest “third option” Brexit proposal, which saw close support in an Exchequers vote.

ECB Minutes Preview: How dovish is Draghi? 3 things to watch

The  European Central Bank  will release its Monetary Policy Accounts on Thursday, July 12th, at 11:30 GMT.

US: Headline and core CPIs to rise of 0.2% m/m in June – Commerzbank

Analysts at Commerzbank offer a sneak peek at what to expect from today’s US CPI report due later at 1230 GMT.

China trade balance preview – TDS

In the view of analysts at TD Securities (TDS),  China’s  June trade balance report is expected to show a healthy increase in imports.