Forex Today: Quiet Asian session gives way to data-packed EU, US sessions

In forex today, thin data came across for the Asian session as traders continue to digest the week’s heavy Dollar action, with a rate hike from the US Fed and positive-leaning data for the domestic US economy driving the Greenback into the week’s end.

Japanese data led the way in Friday’s early trading window, with the Japanese economy overall representing firmer growth figures, which will help to encourage the Bank of Japan (BoJ) to maintain their hyper-easy monetary policy stance looking forward. Hawkish decenters within the Japanese central bank will have a tougher climb uphill as they argue for the BoJ to begin releasing their death grip on interest rates and the Japanese government’s own bond market.

EUR/USD holds below 200-day MA, focus on Italy-Germany yield differential

Italian headlines are a primary driver for EUR confidence heading into the weekend, with the Italian government set to overreach on deficit spending, and trading desks will be keeping an eye out for further headlines as the Italian government and the EU are set for a continued fight over fiscal policy, with a healthy smattering of mid- to low-tier economic data on the docket for the morning, with top-tier preliminary European CPI figures due at 09:00 GMT, and the annualized figure into September is expected to print at 2.1%, a minor uptick from the previous reading of 2.0%, and a missed inflation report here could easily see the EUR/USD continue sliding.

GBP/USD back below 1.31 ahead of the UK’s GDP reading

Brexit headlines continue to weigh on GBP traders, with UK Prime Minister Theresa May continuing to be the rope in the middle of the tug-of-war between staunch EU leaders in Brussels, and hard-line Brexiteers within PM May’s own party in the UK, and uncertainty over Brexit continues to weigh on confidence. Friday also sees another round of Britain’s quarterly GDP at 08:30 GMT, with the q/q figure forecast to hold steady at 0.4%, while the upcoming US session will see the final round of heavy data for the US this week, with the Core Personal Consumption Index slated for 12:30 GMT and expected to clock in at 2% for the year into August, a steady hold from the previous reading.

Key notes from the Asian session

Asian stocks follow Wall Street up the charts, Nikkei clips into decades high

Italy’s Tria: will remain as finance minister to avoid “chaos”

Australia: Credit growth slowing – Westpac

UK’s BCC: ‘no-deal’ Brexit would force number of firms to move to EU – Reuters