The US dollar held its upside momentum and clung onto two-week highs vs. its main competitors in Asia this Tuesday, as the renewed trade concerns over the US-Mexico steel tariffs and Japan-South Korea export curbs dented the risk sentiment. The Asian equity markets dropped, although the Japanese stocks bucked the trend amid the recent Yen weakness. The US equity futures also extended losses while the Treasury yields were on the defensive. Among the Asia-pac currencies, the USD/JPY pair hit fresh six-week tops at 108.89 but failed to sustain at higher levels amid a renewed risk-off wave. The Aussie was the weakest and hit the lowest levels in two-weeks at 0.6954 on the back of lackluster Australian NAB Business Survey, as markets ignored the iron-ore price surge. The Kiwi, on the other hand, traded firmer near 0.6630 levels, despite weaker oil prices and tepid risk sentiment. Among the European currencies, EUR/USD held onto the 1.12 handle while the Cable defended the 1.2500 support amid a lack of clarity on the Brexit issue and ahead of the Fed Chair Powell’s testimony. Meanwhile, the Swiss franc traded on the back foot vs. the greenback, with USD/CHF capped by 0.9950 ahead of the Swiss jobless rate release. Main Topics in Asia Updates on Japan-South Korea trade spat Japan Trade Minister Seko: Japan is required to act within international norms Japan, S. Korea to hold bilateral trade talks this week – Yomiuri Japan’s Suga: Not mulling backing down on S. Korea export restrictions Other key headlines US Commerce Dept: Producers harmed by structural steel imports from China and Mexico – Reuters Mexican EconomyMin: US duty investigation of Mexican structural steel has no relation to section 232 tariffs or Trump Mexican Deputy Foreign Minister: US tariffs on Mexican structural steel is a “new problem” Senior Chinese diplomat warns of ‘disastrous consequences’ if US treats China as ‘enemy’ – SCMP President Trump: A lot of room for growth in the economy Japan’s real wages fall for 5th consecutive month in July Gold technical analysis: Bears aim for a break below 20-DMA UK consumer spending at weakest since mid-90s – BRC Australia NAB business survey bang on expectations for June, Aussie keeps lows NZ Deputy PM Peters takes credit for lower NZD; not responsible for low business confidence Asian stocks ex-Japan drop, Yen hits 6-week low WTI pulls back as trade woes weigh over geopolitics Key Focus Ahead We have a data-sparse EU macro calendar for today, with the only Swiss unemployment rate release of note, dropping in at 0545 GMT. Therefore, the European traders will keep an eye on the Brexit and trade-related development for fresh trading impulse. In contrast, the NA session looks eventful, despite an absence of the first-tier macro data from the US, as a string of the US Federal Reserve (Fed) officials are scheduled to speak today. The main event risk is likely to be the day 1 of the 2-day testimony by the Fed Chair J. Powell before the Congress. Markets will pay close attention to his remarks on the Fed’s interest rates and economic outlook for fresh dollar trades. The speeches by the Fed officials Bullard, Quarles, Bostic will be also closely heard. On the data front, the Canadian housing starts and building permits data will drop in around 1230 GMT while the US JOLTS job openings data and API crude stockpiles report will be published at 1400 GMT and 2030 GMT respectively. EUR/USD trades below 50-day MA ahead of Powell’s testimony The common currency is on the defensive ahead of Powell’s testimony (due at 12:45 GMT), mainly due to expectations that Fed’s Powell may rein in expectations for aggressive Fed rate cuts and partly due to the recent string of dismal German data. GBP/USD: Holding tightly above 1.2500 amid Brexit uncertainty Amid looming Brexit uncertainty, the GBP/USD pair manages to keep the 1.25 handle ahead of the European open. Fed speakers, political/trade headlines will be on the spotlight. S. Korea’s Industry Minister to speak on Japanese export curbs at 0700 GMT Reuters reports that South Korea’s Industry Minister will speak on the Japanese export curbs at 4 PM local time (0700 GMT). Fed: All eyes on Powell’s testimony today In view of analysts at ING, Fed Chairman Powell’s first day of the two-day long testimony in front of the US Congress could sound of imminent easing – or alternatively, the threat of rates on hold and will be keenly watched by the markets. 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 FXStreet News share Read Next US Dollar Index looks to extend gains around 97.40 FX Street 3 years The US dollar held its upside momentum and clung onto two-week highs vs. its main competitors in Asia this Tuesday, as the renewed trade concerns over the US-Mexico steel tariffs and Japan-South Korea export curbs dented the risk sentiment. The Asian equity markets dropped, although the Japanese stocks bucked the trend amid the recent Yen weakness. The US equity futures also extended losses while the Treasury yields were on the defensive. Among the Asia-pac currencies, the USD/JPY pair hit fresh six-week tops at 108.89 but failed to sustain at higher levels amid a renewed risk-off wave. 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