Forex Today in Asia was a quiet affair this Thursday, as the US dollar remained on the back foot across the board, underpinning the sentiment around most majors. The Kiwi emerged the strongest on a solid New Zealand Q2 GDP report while Yen gained momentum and pushed the USD/JPY pair towards the 112 handle amid weaker Treasury yields. The Aussie treaded cautiously near 0.7260 levels, unable to sustain near 3-week tops. The Swiss franc traded modestly flat around 0.9670 heading into the Swiss National Bank (SNB) monetary policy decision.
Main topics in Asia
EU’s Juncker: Brexit deal still “far away” – Reuters
New Zealand GDP: beats expecations on both sides, q/q 1.0%
US ready to resume North Korea talks on denuclearization – Reuters
Russian oil firms seeking alternative to US Dollar – Reuters
China Premier Li: Multilateral trade regime should be upheld, could be further improved via talks
US Sec. of State Pompeo: US is prepared to engage immediately to transform US-DPRK relations
Japan’s Abe wins ruling party leadership election
Key Focus ahead
Heading into Europe, the EUR, GBP traders will see the Swiss trade figures dropping in at 0600 GMT, followed by the Swiss National Bank (SNB) quarterly monetary policy assessment and interest rate decision due to be announced at 0730 GMT.
The SNB is unlikely to make any changes to its monetary policy settings. However, a mild dovish tone is expected in its policy statement, as the Swiss central bank looks to cap further appreciation in the Swiss Franc.
The main market-moving event for today remains the UK retail sales due at 0830 GMT, which is likely to arrive at 2.3% y/y in August versus 3.5% last while m/m sees -0.2% vs. 0.7% last. Alongside, the macro news, the Brexit-related developments will also have a significant impact on the GBP markets.
Moving on, the US economic releases include the weekly jobless claims, Philly Fed manufacturing index and existing home sales. From the Canadian docket, the second-liner ADP jobs data will be reported for August. Later in the NA session, the Eurozone consumer confidence data and ECB policymaker Weidmann’s speech will also garner some attention.
EUR/USD: Bulls need a convincing break above 1.17
The common currency could find acceptance above 1.17 if the spread rolls over in favor of the bears. That could happen in the next day or two as the 10-year treasury yield created a doji candle yesterday, signaling a bullish exhaustion.
GBP/USD: Indecisive market, focus on the UK retail sales release
An above-forecast UK retail sales reading could help the GBP secure a bullish close, while a big miss on expectations could prove costly. Moreover, GBP is already on the defensive, courtesy of the negative Brexit newsflow.
SNB Preview: Leaving the door open for intervention, just in case
A devaluation in the franc would push prices towards 2%, the holy grail of central bankers, but the SNB would not like to battle markets. Therefore, leaving the pledge without any intervention is the likely path of action.
UK Retail sales Preview: Retailers are set to suffer as back-to-school sales are seen not enough
The total UK retail sales are expected to fall -0.2% over the month in August with core retail sales stripping the basket off motor fuel sales expected to fall also -0.2% m/m, the Office for National Statistics is expected to report on Thursday at 8:30 GMT.
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