The risk-on sentiment was the underlying theme in Asia this Wednesday, as the dust settles over the US-China trade war fears. The Asian equity markets return to the green zone while Treasury yields clung to the overnight gains. The US dollar, however, failed to benefit from higher Treasury yields and offered support to most majors. The Aussie was the biggest gainer and tested the 0.7250 level, as the sentiment was lifted after the Chinese Premier Li said that China won’t devalue the Yuan to stimulate the exports. The Kiwi followed suit and regained the 0.66 handle. The USD/JPY pair was little changed on the BoJ’s status-quo and consolidated around 112.35. The Loonie was better bid amid hopes of the NAFTA deal and positive oil prices. Meanwhile, the GBP reversed the early spike to 1.3175 on Brexit headlines and consolidated near 1.3150 levels heading into the UK CPI release. Main topics in Asia Brexit headlines coming through, pound piercing recent highs NZ: Q2 current account deficit widens to 3.3% of GDP – Westpac UK Prime Minister Theresa May: The EU must show goodwill for a Brexit deal China will use trade war with US to replace imports – state media China Premier Li: China won’t devalue currency to stimulate exports BoJ leaves monetary policy unchanged BoJ leaves unchanged forward guidance on rates and economic assessment BoJ’s Kataoka dissents from view that inflation will accelerate toward 2% Key Focus ahead Today’s EUR calendar remains relatively busy, with the UK CPI report for the month of August to headline. The Eurozone current account and construction output data will be also published. The UK headline CPI is expected to come in a tad softer at 2.4% y/y vs. 2.5% previous while core figures are also seen lower at 1.8% y/y vs. 1.9% last. Meanwhile, the BOE Chief Economist Andy Haldane’s speech due at 0800 GMT will also remain in focus. In the NA session, the US housing data will be reported alongside the current account data at 1230 GMT, followed by the EIA crude stocks data at 1430 GMT. Besides, the ECB President Draghi’s speech will also grab a lot of eyeballs ahead of New Zealand’s Q2 GDP release at 2245 GMT. EUR/USD: Inverse head-and-shoulders breakout may remain elusive on rising US-DE yield spread The daily chart of the EUR/USD is flashing a bullish reversal pattern, but a breakout may remain elusive, as the bond yield differentials are rising in the EUR-negative manner. GBP/USD sticking to recent highs ahead of UK CPI reading Pound traders experience some much-needed relief on Brexit headlines after months of stonewalling and unmoving negotiations. Wednesday also features some potentially hard-hitting data, with the UK’s inflation reading hitting at 08:30 GMT. UK CPI Preview: With inflation decelerating in favor of real wages, Sterling will be supported The UK headline inflation is expected to have decelerated to 2.4% y/y in August while core inflation slow to 1.8% y/y. The UK Inflation outpaces the nominal UK wage growth by 0.2% y/y when bonuses are included and by 0.4% y/y excluding bonuses. How to trade the UK inflation with GBP/USD UK inflation is closely watched by the BOE and moves the British Pound. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event. New Zealand Q2 GDP seen lower at 0.5% – Westpac Analysts at Westpac offer their view on New Zealand’s Q2 GDP release due on the cards at 2245 GMT later on Wednesday. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. FXStreet News share Read Next The next rally for GBP/USD will be harder Yohay Elam 3 years The risk-on sentiment was the underlying theme in Asia this Wednesday, as the dust settles over the US-China trade war fears. The Asian equity markets return to the green zone while Treasury yields clung to the overnight gains. The US dollar, however, failed to benefit from higher Treasury yields and offered support to most majors. The Aussie was the biggest gainer and tested the 0.7250 level, as the sentiment was lifted after the Chinese Premier Li said that China won't devalue the Yuan to stimulate the exports. The Kiwi followed suit and regained the 0.66 handle. 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