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Broad-based US dollar was the underlying theme this Friday, as risk-on extended into Asia following the record high close on the Wall Street overnight. Amongst the Asia-pac currencies, the Kiwi extended yesterday’s post-NZ GDP rally and tested 0.67 handle, up +1.20% so far. The Aussie, however, failed to benefit from the outlook upgrade and traded modestly flat just below the 0.7300 level. The USD/JPY pair advanced towards the 113 handle, despite weaker Treasury yields.

On the commodities front, both crude benchmarks treaded cautiously following the latest Trump’s comments while gold prices on Comex traded firmer near $ 1215 level.

Main topics in Asia

Japan National CPI ticks up to 1.3% on annualized basis

S&P raises Australia’s outlook to stable from negative

Japan PM Abe and US President Trump to meet September 23

US sanctions China for buying Russia war planes, missiles – Reuters

Asian stocks broadly higher as risk aversion ebbs

Gold prints 8-day high as dollar index hit 2.5-month low

Key Focus ahead

Markets look forward to a flurry of flash manufacturing and services PMI readings due to be published from across the Euro area economies, starting 0715 GMT. On the other hand, the UK docket remains data-quite, with the only second-liner public sector net borrowings data due at 0830 GMT. The BOE quarterly bulletin is likely to have little effect on the pound, as Brexit optimism will continue to boost the GBP bulls.

In the NA session, the Canadian inflation and retail sales data will be the main event risks for the Loonie while the US calendar sees Markit manufacturing and services PMI releases. Also, of note will be the Bakers Hughes US oil rigs count data that will drop in at 1700 GMT.                      

EUR/USD: Bullish bias strengthens ahead of Eurozone preliminary PMI releases

The EUR could rise above 1.18 if the preliminary  Eurozone  PMI numbers, scheduled for release today, beat estimates and the risk assets remain well bid.

GBP/USD geared to take another run at 1.33 if Brexit hope holds

On the economic calendar little of note exists to carry the GBP through to the weekend, though 08:30 GMT will be seeing the UK’s Public Sector Net Borrowing for August, which is expected to remain relatively steady,  forecast  to come in at £2.85 billion (last £2.872 billion).

How to trade the Canadian Retail Sales with USD/CAD

Retail sales are critical to the Canadian economy and the publication always moves the loonie.  The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.