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The US dollar continued to sag across the board alongside the Treasury yields in Thursday’s Asian trading, dented by the revived hopes of Fed rate cuts following weak US macro data. As a result, the USD/JPY pair traded modestly flat around the 107.75 region, having stalled its overnight recovery led by record high US indices. Meanwhile, holiday-thinned light trading also moves limited.

The AUD/USD pair built on Wednesday’s rebound and hit two-month tops at 0.7049, despite below-forecast Australian retail sales data while the Kiwi also stuck to the recent upside ahead of the 0.67 handle amid a broadly subdued US dollar. However, the further upside remained capped in the Antipodeans, as markets remained jittery amid escalating US-Iran geopolitical tensions and looming US-China trade talks.

The top performer in Asia was the Hong Kong Dollar (HKD) that rallied to 2-year highs against the US at 7.78238 ahead of the jumbo IPO. Brewer Anheuser-Busch InBev NV (AB InBev)  is seeking to raise up to $9.8 billion by listing its Asia-Pacific business in Hong Kong this month.

Among the European currencies, both the Euro and the pound traded on the front foot but further gains remained elusive on falling German/ UK yields and dovish central banks’ expectations. The Swiss franc traded flat vs. the greenback around 0.9860 levels while the Loonie was better bid near 1.3070 region amid oil-price weakness. Gold prices on Comex were flat-lined despite fresh multi-month lows in Treasury yields.

Main Topics in Asia

WTI traders are being whipsawed on increasing geopolitical tensions

USTR Official: Trump Administration to schedule a call next week between US and Chinese trade principals – Reuters

Goldman Sachs: Policy uncertainty and poor earnings to cap upside in stocks

Gold technical analysis: Flatlined in Asia despite flag breakout

PBOC Adviser Ma: US-China trade truce should rule out any need for major new stimulus

US says Federal ban on Huawei sales is not illegal punishment, asks judge to throw out the lawsuit – Bloomberg

Australian Retail Sales (M/M) May miss: 0.1% (exp 0.2%; prev -0.1%)

US Pres. Trump presses China’s Xi on detainment of Canadians – Globe And Mail

Japan PM Abe: ‘No plan to raise sales tax rate further during my administration’

S. Korea FinMin Hong warns of direct countermeasures to Japan’s export curbs

S. Korea Vice FinMin: Sino-US competition could affect nuclear negotiations with N.Korea – Yonhap

Asian stocks track US equities higher

Key Focus Ahead

Following a data-sparse Asian session, the EUR macro calendar is also expected to be a thin-showing, with the Swiss June Consumer Price Index (CPI) report (due at 0630 GMT) and Eurozone May Retail Sales data (at 0900 GMT) to keep the traders busy amid the US Independence Day light trading.

Investors will remain edgy on escalating US-Iran geopolitical woes and looming US-China trade talks, in absence of the fresh US and Canadian economic news.

Meanwhile, the speeches from the European Central Bank (ECB) policymakers Lane and De Guindos, due at 0700 GMT and 0910 GMT respectively, will be closely eyed for fresh EUR trades.

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