Forex today witnessed a recovery in risk appetite, despite looming US-China trade concerns, as the renewed optimism on the Brexit deal and NAFTA lifted market sentiment. As a result, the safe-haven Yen was broadly sold-off, driving the USD/JPY pair closer towards 111.50 barrier while the Antipodeans attempted a tepid recovery, as the Aussie shrugged off a dip in the Australian NAB business confidence gauge. Moreover, the commodity-currencies also derived support from positive commodities’ prices and a risk-on rally seen in the Asian equity markets.
Meanwhile, the pound consolidated the overnight gains just under the 1.3050 level while the common currency wavered around the 1.16 handle. The Canadian dollar also traded firmer near 1.3150 versus its American counterpart amid ongoing NAFTA talks.
Main topics in Asia
Key Focus ahead
Heading into Europe, markets eagerly await the release of the UK labor market report at 0830 GMT, as the Kingdom’s wage growth numbers remain the main focus, which is expected to inch higher to 2.8% in July versus 2.7% booked in June. Also, of relevance remains the German ZEW economic surveys that will be reported at 0900 GMT alongside the Eurozone ZEW surveys and employment data.
The NA session appears data-light, with the second-liner Canadian housing starts and the US JOLTS job openings due on the cards at 1215 GMT and 1400 GMT respectively. Meanwhile, markets will continue to take cues from the Brexit and trade-related developments for some trading impetus.
The EUR looks set to gain altitude in the near-term. The rally could gather pace if the German ZEW survey indices, due for release at 09:00 GMT, beats estimates and …
Pound bulls have been seizing on the good news and pumping up the GBP on Brexit hopes for the second time in two weeks, and Tuesday sees another iteration of the UK’s q/y Average Earnings at 08:30 GMT.
It is going to be a busy week in the markets, particularly for the pound with the upcoming release of key UK economic data, BoE’s rate decision and perhaps more importantly Brexit-related headlines.
Analysts at Barclays offer a sneak peek at what to expect from the Bank of England (BOE) monetary policy meeting due later on Thursday.