Forex today replicated the moves seen in Asia a day before, as the risk-on trades got a fresh boost from a higher Yuan fix amid US-China trade talks and fading Turkey fears. Amongst the Asia-pac currencies, the Aussie was the best bet today, as it tracked the Yuan higher, despite RBA Governor Lowe’s currency jawboning while the greenback kept its corrective downside intact. The Kiwi traded better bid following a positive surprised delivered by New Zealand’s PPI data. Meanwhile, the USD/JPY pair traded listlessly below the 111 handle amid a lack of fresh fundamental catalysts and mixed Asian equities.
On the commodities’ front, gold futures on Comex traded on the back foot near $ 1183 levels while oil prices remained subdued ahead of the US drilling report. Copper prices on Comex advanced 0.50% to trade around $ 2.62 mark.
Main topics in Asia
RBA’s Lowe: Next move in rates should be up
Reserve Bank of Australia (RBA) Governor Phillip Lowe gave his opening statement to the House of Representatives Standing Committee on Economics in Canberra on the RBA’s outlook on the Aussie economy and interest rates.
RBA’s Lowe: Some further modest depreciation in AUD would be helpful
More comments flowing in from the Reserve Bank of Australia (RBA) Governor Phillip Lowe, via Reuters, as he continues to testify before the House of Representatives’ Standing Committee on Economics, in Canberra.
Japan Tankan shows manufacturing confidence higher – Reuters Poll
According to the Reuters Bank of Japan (BoJ) Tankan survey, which was conducted across 261 firms from August 1st to 14th, manufacturing confidence has hit a seven-month high in Japan, though non-manufacturing is seeing a slump into two-year lows.
More US sanctions for Turkey if they don’t obey – Reuters
According to Reuters, the US is warning Turkey that if they don’t release detained American pastor Andrew Brunson, though the US is seeing relations deteriorate with the small country.
PBOC has drained CNY 1.112 trillion YTD in 2018 vs. CNY 65 billion net drain in 2017
The People’s Bank of China (PBOC) issued a statement on Friday, citing that it has drained CNY 1.112 trillion via Open Market Operations (OMOs) so far this year versus a net drain of CNY 65 billion in 2017
BoJ left the amounts of Japanese Government Bond buying unchanged today
On Friday, the Bank of Japan (BoJ) left the amounts of the Japanese Government Bond (JGB) purchases unchanged from its previous operation.
USD/TRY Technical Analysis: Prepping for a re-test of 6.00
The USD/TRY hourly chart shows a bullish relative strength index (RSI) divergence. As a result, the pair could witness an upside break of the falling channel and rise above 6.00 in the next few hours.
Key Focus ahead
Friday sees a light EUR calendar, with nothing of significance due for release except for the Eurozone current account and final CPI reading that will be reported at 0800 GMT and 0900 GMT respectively. Besides, the speech by the RBA Assistant Governor Ellis due at 0730 GMT will also remain in focus following Governor Lowe’s comments delivered earlier today. Also, the market will pay close attention to the UK’s no Brexit deal plan that will be unveiled later today.
The Canadian CPI data will headline the NA session, with the key focus on the Bank of Canada’s (BOC) inflation gauge that will show up at 1230 GMT. Meanwhile, the US docket sees the prelim UoM consumer sentiment at 1400 GMT among other minority reports slated for release ahead of the US rigs count data at 1700 GMT.
EUR/USD: Risk reversals and volatility gauge indicate the EUR may have bottomed out
The common currency could pick up a strong bid if the Eurozone July CPI prints above the estimate of 0.3 percent month-on-month drop.
GBP/USD holding near 1.27 as Brexit returns to the forefront
The GBP/USD heads into Friday’s London market session with overall market sentiment firmly in the driver’s seat and traders’ attention focused on Brexit.
Dollar Index Technical Analysis: DXY is charting a head-and-shoulders pattern
The dollar index (DXY) is charting a head-and-shoulders pattern with the neckline support of 96.36, having witnessed a bearish divergence of the hourly relative strength index(RSI) and a lower highs pattern earlier this week, the hourly chart indicates.
Fed Chair Powell to speak at Jackson Hole Symposium next Friday August 24
The US Federal Reserve (Fed) announced late-Thursday, the Fed Chairman Jerome Powell is scheduled to speak next Friday, Aug. 24, at the annual global central bank conference in Jackson Hole, Wyoming.
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