Forex Today: Yen benefits from Asia risk-off, German Ifo in focus

Forex Today kicked-off the week on a cautious note, as risk-off remained the main theme in Asia, following the Wall Street Journal (WSJ) reports that Trump is considering new curbs on the Chinese investment. As a result, the safe-haven Yen was the biggest gainer while the higher-yielding currencies such as the Antipodeans suffered losses on global trade war fears. The Canadian dollar also remained weighed down by the oil-price weakness and negative market sentiment. Meanwhile, both the EUR and GBP traded little changed amid subdued US dollar trades across the board, despite a sell-off in Treasury yields.

Among other related markets, the Asian stock markets traded mostly lower while both crude benchmarks dropped following the OPEC’s decision to increase oil supplies. Gold prices on Comex stalled its recovery mode and fell back below the $ 1270 mark.

Main topics in Asia

Over the weekend: OPEC on pace to lift limits, trade tensions draw action out of the PBoC

In comparison to recent weekends, it was a fairly sedate affair for the markets off-days, though headlines coming out of oil-producing nations, as well as continuing tensions both within and outside of the EU.

BoJ Summary of Opinions: trade concerns need to be watched, wages still flat

The Bank of Japan (BoJ) is out with their latest Summary of Opinions from the latest rounds from within the central bank, and little of note has changed or altered in the BoJ’s stance “¦

PBOC cuts some banks’ reserve requirements to boost lending

The People’s Bank of China said on Sunday it would cut the reserve requirement rate  – the amount of cash  that some banks must hold as reserves by 50 basis points (bps), effective July 5.  

Trump planning new curbs on Chinese investment in the US – WSJ

As reported by the Wall Street Journal, unnamed sources within the White House are warning that the US  President Trump  is trying  to figure out how to further impede Chinese investment money from making its way into the US.

Brent oil drops 2 percent in Asia

Brent  oil  fell in Asia as traders price-in an expected output increase that was announced by the Organization of the Petroleum Exporting Countries (OPEC) on Friday, according to Reuters.

USD/TRY falls below 4.56 and snaps back following Turkish election win for Erdogan

The USD/TRY is on the rise for Monday, up over 1.4% from the day’s early low after surprise results from the Turkish election put the incumbent Erdogan back in the seat of power.

Key Focus ahead

We have a quiet start to this week, in terms of the calendar ahead, with Europe to see the release of the German Ifo business surveys. Moving onto the NA session, the US new home sales data will be reported amid other minority reports, which is expected to have virtually no impact on the fx markets.

EUR/USD: Bullish signs build up amid T-yield curve flattening, trade war fears

The  EUR/USD  could go on the offensive this week, amid rising US-China trade tensions and the relentless flattening of the Treasury yield curve. The spread between the US 10-year treasury yield and the 2-year treasury yield fell to 34 basis points today – the lowest level since October 2007.  

GBP/USD holding steady on a lackluster Monday as Brexit continues to go nowhere

The  GBP/USD  is trading flat ahead of a Monday that sees little relevant data for the Sterling, and traders’ focus is expected to be split between overall market sentiment based on trade tensions globally, and the still-raging Brexit debate taking place closer to home.

Quiet Monday ahead has German IFO, US Home Sales in focus – TDS

As noted by analysts at TD Global Securities, Monday’s Asia session brings a thin schedule, and last Friday’s risk-on stance is expected to continue into the new week.

RBNZ is seen raising rates by Q3 2019 – Reuters Poll

The Reserve Bank of New Zealand (RBNZ) is seen maintaining the status quo later this week and will likely lift  rates  by the third quarter of 2019, the latest Reuters poll showed.