Forex Today in Asia was mainly driven by broad-based US dollar weakness, in absence of fresh fundamental drivers while the RBA monetary policy minutes offered no new information. The greenback extended the renewed downside across its main competitors, weighed down by the US President Trump’s criticism of the Fed’s interest rates policy.
Amidst broad US dollar selling, the Kiwi benefited the most and rallied to 0.6670 levels, despite downbeat New Zealand’s credit card spendings data while the Euro was the next best performer, having hit a high of 1.1542 earlier this session. The higher-yielding currencies, the Aussie and Sterling, also moved higher, as the Asian equities traded firmer amid expectations of easing US-China trade tensions.
Amongst the commodities, Comex gold futures traded with sizeable gains above $ 1200 mark while copper futures also edged higher near $ 2.68. Meanwhile, both crude benchmarks traded modestly flat heading into the US weekly fuel data due later on Tuesday.
Main topics in Asia
RBA’s Lowe making remarks at a Breakfast event – “…next move up, not down”
Aussie PM Turnbull retains his position, but only just
UK to boost exports to 35% of GDP
RBA Minutes: No strong case for a near term rate move
Australian PM Turnbull: Disunity undermines the ability of the government to get job done
Carrot and stick approach: US moves towards new tariffs on China despite trade talks: WSJ
USD/JPY Intermarket Analysis: 10Y spread sees head-and-shoulders breakdown, favors JPY bulls
Key Focus ahead
The EUR calendar remains data-light for the second day in a row this Tuesday, with markets eagerly awaiting the UK public sector net borrowing data and CBI industrial order expectations for some fresh incentives.
The NA session is also likely to be a thin showing, in absence of any first-tier macro news from the US docket while Canada sees the second-liner wholesale sales numbers at 1230 GMT. Later on, New Zealand’s fortnightly dairy auction results will be published by Fonterra around 2000 GMT, followed by the American Petroleum Institute’s (API) weekly crude stockpiles report at 2030. Also, in focus remains the NZ Q2 retail sales report slated for release at 2245 GMT.
EUR/USD moves above 1.15, focus on Italy and US bond yields
The EUR/USD could continue to climb toward 50-day MA located at 1.1613 if the treasury yields extend the decline. It is worth noting that the EUR/USD may not be able to score gains on the back of a drop in the Treasury yields if the Italian bond yields rise on fiscal concerns.
GBP/USD eyes 1.2850 as Trump’s Fed criticism overshadows Brexit uncertainty
The GBP/USD pair extends its recovery from thirteen-month lows of 1.2662 into the fifth day today, with the bulls now looking to regain the 1.2850 barrier heading towards the European session.
Gold Technical Analysis: Bulls need to defend trendline support of $1,190
A repeated rejection at the 200-hour MA could yield a pullback, although the outlook would remain bullish as long as the yellow metal is holding above the ascending trendline support of $1,190.
“Economic Calendar is relatively light on this Tuesday as well, but there is a potential Kiwi Dollar shaker on the agenda, so stay with us.”
FOMC minutes to highlight gradual rate hikes remain appropriate – Barclays
The Barclays Research Team offers a brief preview of Wednesday’s FOMC minutes that will be published at 1800 GMT.
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