Forex Today: Yuan sellers returns to Asia, focus shifts to US Q2 GDP

Forex Today experienced moderate risk-aversion, as the Yuan weakness returned to the markets, leaving investors on the edge again. The US dollar consolidated yesterday’s rally versus its main competitors. The Yen regained control amid risk-averse market condition and subdued Treasury yields while the Antipodeans traded mixed, with the Aussie clinging onto the recovery gains, in response to the bounce in copper prices. Meanwhile, oil prices traded almost unchanged, with WTI looking to regain the $ 70 mark. Comex gold futures, on the other hand, traded on the back foot near $ 1223 levels amid higher Asian equities.

Main topics in Asia

US President Trump could order a strike on Iran – ABC Australia

As reported by ABC  News  Australia, sources within the Turnbull government say that the US could be prepared to bomb key nuclear strategic targets in Iran as soon as next month.

Republican lawmakers still sceptical on EU-US trade – Reuters

As reported by  Reuters, Republican officials remain on the sidelines about the success of trade talks between US  President Trump  and the European Union’s Jean-Claude Juncker.

IMF sees China growth at 6.6% for 2018

The International Monetary Fund (IMF) is expecting growth in China to top out at 6.6% this year.

Asian stocks mixed as trade angst continues to weigh on China indexes

Equities in the Asian market session are mixed for Friday, with Japanese equities on the optimistic  side, while Chinese equities remain cautious on continuing trade concerns with Shanghai’s CSI 300 index testing near 3,500.00.

China supports WTO reform – China Commerce Ministry

“China is supportive of WTO reform, and hopes the reform will address the concerns of most members and reflect their needs”, China’s  Ministry of Commerce spokesperson Gao Feng said.

USD/CNH holds above 6.8 after bullish outside-day

The USD/CNH pair (offshore Yuan exchange rate) rose to 6.8306 earlier today and was last seen trading largely unchanged around 6.8227.

Trump thinks Friday’s GDP numbers in the US will be terrific

Comments crossed the wires earlier today from the US  President Trump, as he expressed his take on the  US Q2 GDP figures  due to be released at 1230 GMT this Friday.

State-owned Chinese banks seen selling US dollar against the Yuan – Reuters

Reuters reports the latest chatter doing the rounds that the large state-owned Chinese banks seem to be selling  US dollar  against the Yuan in the forwards market, in an effort to stall the Yuan declines.

Key Focus ahead

Heading into the European session on the final trading day of this week, the macro calendar remains data-empty, and hence, all eyes remain on the US docket, with the key first estimate of the second quarter GDP slated for release at 1230 GMT.

The annualized US Q2 GDP growth rate is expected to jump to 4.1% versus 2.0% previous. Also, of note remains the core personal consumption expenditure and revised UoM consumer sentiment that will wrap up a data-light ECB week.

Ahead of the US data, markets will also look forward to the FOMC member Bullard’s speech scheduled at 1200 GMT for any fresh hints on the US interest rates outlook, especially after the US President Trump’s take on the Fed’s rate hike policy.

EUR/USD: Pennnat intact, bearish outside-day fails to revive Put demand

The options data calls for caution on the part of the aggressive EUR bears. That said, an above-forecast GDP reading (due today) could yield a downside break of pennant pattern, boosting demand for the EUR puts.

GBP/USD hanging onto 1.31 ahead of US GDP figures

Friday offers nothing on the GBP side of the  economic calendar, and traders will be focusing on the US preliminary GDP figures due at 12:30 GMT and the headliner annualized GDP for Q2 is forecast to clock in at 4.1%, versus the previous reading of 2.0%.

US GDP Preview: After the Trump leak, look beyond the headline number

The United States publishes the first estimate of Gross Domestic Product for the second quarter on Friday, July 27th, at 12:30 GMT.

North, South Korea to hold military talks on July 31 – Yonhap

South Korea’s state  news  agency’s Yonhap cited South Korea’s Defence Ministry on Friday, as saying that South and North Korea agreed to hold military talks on Tuesday.