Risk reset was the underlying theme in Tuesday’s Asian session, as markets reassessed the US-Iran geopolitical risks amid no signs of escalation in sight. Meanwhile, conciliatory comments from the US Defense Secretary Esper also underpinned the sentiment. Esper said that US troops are not planning on pulling out of Iraq and that America would not target Iranian cultural sites if further hostilities break out. The US dollar traded broadly listless that kept the EUR/USD and Cable somewhat buoyed while the Japanese yen lost ground amid a recovery seen in the Asian equities and Treasury yields. USD/JPY bounced-off 108.31 lows and retested 108.50. The Antipodeans, on the other hand, remained under pressure, with the Aussie downed by rising concerns of the Australian bushfires on the economic growth and downbeat local ANZ Jobs Advertisement data. Also, the downside correction in commodities’ prices, including gold and oil, weighed on the commodity-currencies. Main Topics in Asia US-Iran updates Report: Trump administration bars Iran’s Zarif from entering the US – HuffPost US Defence Secretary: Military would “follow the laws of armed conflict” – WaPo Senate aides: Top Trump administration officials to brief US Senate on Iran-Iraq Wednesday – Reuters Trump administration begins drafting possible sanctions against Iraq – WaPo WH Official: US Vice President Pence to lay out Iran policy in speech next Monday Other key headlines Economic cost of bushfires estimated at $2 billion and rising – The Sunday Morning Herald Australia’s bushfires to cut Australian GDP growth by 0.3% – Goldman Sachs China’s official: Will not change annual import purchase quotas of farm goods from US China-US phase one trade deal on track – Global Times Sources: India plans to cut spending to curb deficit – Reuters Japan’s Aso: Fundamentals that support domestic demand remains solid Indonesian Consumer Confidence jumps to 126.4 in Dec, Rupiah hits two-day highs Key Focus Ahead In the European session ahead, the Eurozone Preliminary Consumer Price Index (CPI), due at 1000 GMT, will headline. At the same time, the bloc’s Retail Sales data for November will be also published. Ahead of these events, the Swiss CPI report will drop in at 0730 GMT, although is unlikely to have a significant impact on the CHF markets. There is nothing relevant from the UK docket and therefore, the focus will remain on the UK parliamentary voting on the PM Johnson’s Brexit Withdrawal Agreement Bill. Looking at the NA calendar, the Trade Balance data from both the US and Canada will be reported at 1330 GMT. However, the US ISM Non-Manufacturing PMI and Factory Orders data releases will hog the limelight in the American trades at 1500 GMT and direct the USD price-action going forward. New Zealand’s GDT Price Index is also due on the cards around 1500 GMT, followed by US American Petroleum Institute (API) weekly Crude Stocks data due at 2130 GMT. Despite the macro releases, investors will remain watchful of the looming US-Iran tensions and any impact of the fresh developments surrounding it on the global markets. EUR/USD looks north, to set fresh multi-month high on weak US ISM data EUR/USD is looking north, having carved out a bullish higher low in the last two trading days and could rise to five-month highs above 1.1239 if the US data shows deceleration or contraction in the non-manufacturing activity. GBP/USD extends recovery, eyes on the return of UK Parliament MPs GBP/USD seems to carry the gains amid large expectations that the UK PM’s Brexit plan will be passed in today’s voting. Risk reset and uncertainty surrounding the UK opposition Labour Party’s future also help the cable. Eurozone inflation preview: Highest core CPI since 2013 may send EUR/USD higher Preliminary inflation figures for December 2019 are set to show healthy price development. A 0.1% increase in core inflation would send it to the highest in over six years. US ISM Non-Manufacturing PMI December Preview: Last call for the concerned? Services PMI expected to edge higher in December despite the drop in manufacturing. New orders index in services has improved in the last two months. Employment has bounced from September’s five year low. 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 Iran’s Zarif: US attack on Soleimani has made the world, US more unsafe FX Street 2 years Risk reset was the underlying theme in Tuesday’s Asian session, as markets reassessed the US-Iran geopolitical risks amid no signs of escalation in sight. Meanwhile, conciliatory comments from the US Defense Secretary Esper also underpinned the sentiment. Esper said that US troops are not planning on pulling out of Iraq and that America would not target Iranian cultural sites if further hostilities break out. The US dollar traded broadly listless that kept the EUR/USD and Cable somewhat buoyed while the Japanese yen lost ground amid a recovery seen in the Asian equities and Treasury yields. 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