Forex today cheered a risk-friendly market environment amid higher Asian stocks, oil prices and US equity futures, as pessimism over the UK political scenario and trade war faded. The safe-haven gold fell nearly USD 3 towards 1280 levels in Asia while the Yen failed to capitalize on a move higher and returned to the red zone vs. the US dollar near mid-109s.
The Antipodeans traded firmer above 0.6900, with the Aussie lifted by the rally in the Chinese iron-ore prices to record highs and upbeat Australian consumer confidence data. The Kiwi regained 0.6550 barrier but further upside looked dicey ahead of the key Reserve Bank of New Zealand (RBNZ) Financial Stability Report (FSR) and NZ 2019 Budget due later this week.
Amongst the European currencies, the EUR/USD pair failed to sustain above the 1.12 handle and turned lower amid broad USD recovery and EU election outcomes while the Cable remained flatlined near 1.2675, awaiting some clarity on the UK political situation.
Main Topics in Asia
UK Housing Minister Kit Malthouse becomes 10th contender in Tory leadership race – The Sun
Gold: Failure to cross immediate resistances please sellers amid USD recovery
Japan’s Aso: Japan and the US have a deeper understanding on trade
Japanese EcoMin Motegi: Not in full agreement yet with US on trade
Japan Macro Advisors: It’s time for BOJ to do more, Yen intervention likely – FT
China’s Securities Regulator: Looking to give foreign investors more access to futures market
NZ FinMin Robertson: At least some of the 2019 Budget has leaked
US Pres. Trump: “Meetings with Japanese PM Abe went very well”
UK PM candidate Gove: Better if Britain leaves EU with a deal
Brent oil consolidates near $70 after two-day rally
Asian stocks chalk up gains despite Trump’s comments on trade deal
US Pres. Trump reportedly asked Japanese PM Abe to help arrange a US-Iran Summit – FNN
Key Focus Ahead
After a quiet start to the week, Tuesday’s EUR macro calendar offers a slew of second-tier economic releases due on the cards from Germany, the UK and Euroland. The calendar kicks off with the Swiss Q1 GDP release at 0545 GMT, followed by the German Gfk consumer climate, import price index data and Switzerland’s trade figures, all dropping in at 0600 GMT. Post-EU open, traders will look forward to the Eurozone credit growth data and the UK BBA mortgage approvals report due at 0800 GMT and 0830 GMT respectively. At 0900 GMT, a raft of May confidence numbers from the Euroland will be reported.
In the NA session, the main focus will remain on the US CB consumer confidence gauge due for release at 1400 GMT, for fresh cues on the US economic health. Also, the US home price index and the Dallas Fed manufacturing index will be slated for release. Later towards the NY close, at 2100 GMT, the Reserve Bank of New Zealand (RBNZ) Financial Stability Report (FSR) will be published.
Besides the data, the trade-related developments and UK political updates will have a strong bearing on the overall market sentiment.
EUR/USD: Reverses lower from 4H 200MA ahead of German Gfk consumer confidence
EUR/USD is feeling the pull of gravity ahead of key German data releases. The shared currency failed to cut through the 4-hour chart 200-candle moving average (MA) resistance of 1.1214 on Monday and is now trading on the defensive near 1.1180 region.
GBP/USD awaits UK traders’ reaction to latest political news/events
Even if there are no major economics up for publishing from the UK, expectedly weaker housing and manufacturing data from the US, coupled with soft consumer confidence, could entertain momentum traders together with their response to latest political plays.
BOC Preview: Balance of risks tilt towards a more optimistic statement – TDS
In the view of the analysts at TD Securities, the Bank of Canada (BOC) is likely to maintain its status-quo at the May monetary policy meeting due on Wednesday.
NZ Budget: Likely to have a feel-good factor around the dollars and cents outlook – BNZ
Analysts at the Bank of New Zealand (BNZ) offer a sneak peek into New Zealand’s 2019 Budget due to be announced this Thursday.