Forex Today: Trade wars in the spotlight ahead of US NFP, Aussie benefits from retail sales

Friday’s Asian session carries the late-Thursday moves, triggered through the trade war escalation, as the US President Donald Trump stands ready to tax the hell out of China unless they agree for a trade deal. Adding to the pessimism was North Korea’s third round of missile test in a week’s time and the White House notice of the President Trump’s EU trade term announcement at 18:45 BST on Friday. At the data front, Australian Retail Sales and PPI flashed upbeat numbers while BOJ minutes sound a bit hawkish.

USD/JPY holds its stand as a winner while Gold stands on the other extreme amid worries emanating from China, one of the world’s largest bullion user. The AUD/USD benefits from upbeat Australia data raising bars for the Reserve Bank of Australia’s (RBA) immediate rate cuts whereas NZD/USD couldn’t ignore commodity traders’ pain. Moving on, the GBP/USD extended its downpour as UK lawmakers continue preparing for a no-deal Brexit while EUR/USD retreats as markets prepare for Eurozone Retail Sales, US employment data. Furthermore, USD/CAD couldn’t portray the WTI increase, driven due to the fresh US-Venezuela tension, and the USD/CHF portrays downbeat market sentiment before Swiss inflation numbers.

Main Topics in Asia

President Trump to make an announcement on EU trade at 13:45 EST

US Secretary of State: China has taken advantage of trade for decades – Bloomberg

Aussie Retail Sales beat by 0.1% MoM, miss 0.1% QoQ

Japan removes South Korea from trusted export white list – Bloomberg

President Trump: Until there’s a deal, we’ll be taxing hell out of China

BoJ Minutes for Jun 19 and 20 2019 meeting: Members felt it appropriate to keep easing persistently

US President Trump ruled out Treasury Sec. Mnuchin’s proposal to warn China – Bloomberg

UK Chancellor Sajid Javid orders HMRC to ramp up no-deal Brexit preparations – FT

Moody’s: UK’s credit profile vulnerable to new government’s spending plans

US officials: North Korea conducts new projectile launch – Reuters

Key Focus Ahead

It’s the US jobs report day and hence nothing matters more than the Nonfarm Payrolls (NFP) up for publishing at 12:30 GMT. However, July month Swiss Consumer Price Index (CPI) and Eurozone Retail Sales for June can offer intermediate moves. Additionally, Canadian trade numbers, the US Michigan Consumer Sentiment Index and Factory Orders could also entertain traders.

Having witnessed two months of volatile employment numbers from the US, the NFP are returning to the long-term averages with 164K forecast. Also, the Average Hourly Earnings (YoY) can increase to 3.2% from 3.1% while no change is expected from the Unemployment Rate of 3.7%.

EUR/USD: Focus on US non-farm payrolls, today’s close pivotal

EUR/USD rejected near 1.11 in Asia, possibly due to risk aversion.  The quote could drop below 1.10 if the US non-farm payrolls data blows past expectations.   Bull hammer reversal likely if the data misses estimates.  

GBP/USD: No respite for Sterling bulls despite sliding US yields

GBP/USD rejected at 5-day MA hurdle amid Sino-US trade tensions.  US 10-year bond yield fell 20 basis points on Thursday but failed to put a strong bid.   A weaker-than-expected US jobs data could yield a corrective rally.  

Non-Farm Payrolls Preview: Focus on wages in a dollar-friendly setup – Five EUR/USD scenarios

US Non-Farm Payrolls are set to provide a fresh direction after markets digested the Fed decision. Low expectations may lead to a positive surprise. The US dollar is well-positioned into the release.