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Broad-based US dollar weakness was the key theme across the fx space in Asia this Thursday, as the safe-haven appeal of the greenback was dulled by the risk-on market profile induced by upbeat Chinese trade figures and Trump’s flexibility on the US tariff deadline for the Chinese imports. As a result, most majors staged a rebound against the buck, with the Antipodeans having emerged the clear winners while the anti-risk Yen traded on the back foot. The USD/JPY pair clinched fresh 2019 highs above the 111 handle and hovered near the last towards the Asia closing. Meanwhile, both the pound and the common currency traded with moderate gains amid hopes of Brexit delay and upbeat German growth numbers. The Loonie benefited from higher oil prices, with USD/CAD having tested lows near 1.3235 region.

Among other related markets, gold prices on Comex struggled to extend the recovery above 1312 levels, despite cautious Asian equity markets, as the US-China trade news weighed.

Main Topics in Asia

Japan’s fourth quarter annualized GDP rose 1.4 percent

Japan’s Motegi: Expect domestic demand-led recovery to continue

PBOC official: Considering measures to adjust lending rates for companies – China Daily

Goldman Sachs: US economy still chugging along – CNBC

WTI Technical Analysis: $54.15-20 becomes immediate obstacle towards $55.55

China Jan Trade (CNY terms): Surplus expands as exports surge

China Jan Trade (USD terms): Surplus expands on smaller decline in imports

China’s trade surplus with the US declined in January

40 former British Ambassadors call on PM May to delay Brexit – The Times

Gold Technical Analysis: Downside favored on bearish outside reversal and bear flag

US President Trump considering 60-day extension for deadline on higher tariffs for China imports

Key Focus Ahead

Thursday’s EUR macro calendar kicks-off with the critical German preliminary GDP release for the fourth quarter at 0700 GMT alongside the WPI data. The German economic growth is expected to see an upturn in Q4 2018 at 0.1% q/q vs. -0.2% last. Next of note remains the Eurozone flash GDP and jobs report that will drop in at 1000 GMT. The bloc’s GDP growth rate is expected to hold steady across the time horizon in Q4.  

The NA session remains quite eventful, with plenty of event risks from the US economy, including the retail sales, PPI and weekly jobless claims due at 1330 GMT. At the same time, the Canadian manufacturing shipments and house prices data will be published. Later in the mid-American session, a couple of minority reports will be released from the US docket ahead of New Zealand business PMI reading due at 2130 GMT.

Apart from the data, the speeches from the global central bankers are scheduled as follows:

0930 GMT: BOE board member Vlieghe

2030 GMT: RBA Kent

When is the German Prelim GDP and how could it affect EUR/USD?

Germany, the largest economy in the euro-zone, will publish its preliminary Gross Domestic Product report for Q4 at 7:00 GMT today.  

GBP/USD rebounds on Brexit news ahead of the London open

Looking forward, a lack of British economics to publish puts a higher emphasis on the developments at the UK Parliament. PM May is still trying hard to get her plan through parliament rather than tabling the delay.  

Euro Zone Q4 GDP & US Retail Sales [Video]

Preliminary German Gross Domestic Product for the fourth quarter opens this agenda at 7 o’clock in the morning. The economy contracted by point 2 percent in the third quarter and this was the first quarterly contraction since mid-2014.  

US Retail Sales Preview: Holidays are unpredictable

Retail  sales are expected to rise 0.2% in December as they did the prior month. Sales excluding automobiles should fall to 0.1% after November’s 0.2% increase.