Forex today continued to witness holiday-thinned trading in Asia, as financial markets in Australia, Hong Kong and many major European economies remain closed this Easter Monday.
Amid light trading, broad-based US dollar strength was the key underlying theme, in the wake of the relative strength of the US economy, especially after a stellar US retail sales report released last Thursday. As a result, most majors traded on the back foot while the USD/JPY pair traded in a tight range capped by the 112 handle.
The Antipodeans turned lower but held onto its recent familiar trading ranges, despite the oil-price rally. Both crude benchmarks rallied to fresh five-month tops after the Washington Post reported that the US will try to force the Iranian oil exports to zero. The Canadian dollar benefitted the most across the fx space, with the USD/CAD pair moving further away from the 1.34 handle. Meanwhile, both the European currencies, the Euro and the GBP, traded modestly flat, as markets look forward to fresh economic news and Brexit-related headlines.
Main Topics in Asia
Sir Graham Brady to tell UK PM Theresa May: Stand down or be ousted – The Sunday Times
US Sec. of State Pompeo says nothing’s changed on North Korea talks: ‘It’ll be my team’ – Reuters
Sri Lanka Easter bombings kill more than 200; several Americans dead – WSJ
No more waivers: The US will try to force Iranian oil exports to zero – Washington Post
Iran sanctions power crude oil to 5-month highs
Gold Technical Analysis: Witnessing oversold bounce as expected
USD/INR Technical Analysis: Hits 6-week high, Falling wegde seen on weekly chart
Key Focus Ahead
Amid a lack of fresh EUR macro releases, as most major European markets are out on Easter Monday holiday, the next of relevance remains the US existing home sales data due later today at 1400 GMT. Until the release, the broader market sentiment amidst the oil rally and USD dynamics will continue to drive the fx markets.
Attention now turns towards the key economic data/ events due on the cards in the week ahead, with the Australian Q1 CPI report, the Bank of Canada (BOC) and Bank of Japan (BOJ) monetary policy decisions, US Q1 prelim GDP report eagerly await for fresh trading impetus following the recent range trade seen across the fx board.
EUR/USD: Prospects of fresh YTD lows rising along with improving US economy
EUR/USD may drop to fresh year-to-date lows below 1.1176 in the near term, as the recent US economic data releases have pointed to a stronger economy in the first three months than previously expected.
GBP/USD revisits 1.3000 mark despite Easter Monday, Brexit pessimism
The GBP/USD pair recently bounced off 200-day simple moving average (SMA) despite negative Brexit headlines and Easter Monday holidays at the majority of global markets.
GBP/USD Forecast: After losing uptrend support, only a cross-party accord can lift it
The light calendar and the return of parliament on Tuesday mean that Brexit is back to the forefront. Negotiations between the two main parties may accelerate with everybody back in the capital.
Six Events to Watch Next Week
With some markets closed on Monday, the week not only will have a slow start but the potential to change the investment climate is low.
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