FX Today: Aussie slips on aggressive RBA rate cut calls; eyes on UK data/ politics

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Having witnessed a volatile US session on Thursday, forex today was a quiet affair in Friday’s Asian trading. However, softer risk tones prevailed across the Asian equity markets amid looming concerns over the US-China war and UK political uncertainty. Therefore, the corrective bounce in the USD/JPY pair lost legs at 109.75. The bears regained control and sent the rates back towards the midpoint of the 109 handle, as in-line with estimates Japanese CPI figures also lent support to the Japanese currency.

The Aussie witnessed a sharper drop from near 0.6905 to 0.6880 after Westpac called for aggressive RBA rate cuts this year. The bank revised its 2019 RBA rate cut forecast from 2 to 3 now. Meanwhile, the Kiwi traded little changed near 0.6520 levels, stuck in a tight range amid fresh catalysts and risk-off. The Loonie also traded modestly flat, unable to benefit from the bounce in oil prices. Gold prices on Comex consolidated its recent bounce well above the 1280 mark.

Amongst the European currencies, the EUR/USD pair capped its corrective rally near 1.1190 while the Cable remained better bid near 1.2660 ahead of the key UK retail sales data.

Main Topics in Asia

US moves to impose duties on countries undervaluing currency – RTRS

Gold could shine on, en route towards channel resistance

Former Adviser to Abe: Japan should delay sales tax hike

New Zealand PM Ardern: New Zealand’s economic growth likely to be slower

WTI bounces off 100-day SMA as traders await fresh clues after latest drop

RBA to cut the cash rate to 0.75% by November – Westpac

China’s Commerce Ministry: China’s trade environment growing more uncertain

China weighs allowing the renminbi to ‘crack 7’ – FT

Asian stocks drop following turbulent trading on Wall 
Street

Japan PM Abe is said to be considering visiting Iran next month – FNN

US 10-year treasury yield hits lowest since October 2017

ECB’s Vasle: Economy still in line with projections from March

Key Focus Ahead

The UK April retail sales report, due at 0830 GMT, will headline Friday’s EUR calendar, in absence of any macro news from the Euroland. The British consumers are seen spending less in the month of April, with the retail trade figures likely to drop by 0.3% m/m while rising 4.6% on a yearly basis. The core figures are also seen disappointing in the reported month. Later in mid-Europe at 100 GMT, the UK CBI realized sales data will be published, which is also likely to see a slower pace of growth at 8% for April.

In the NA session, the main event risk is likely to be the US durable goods data release lined up at 1230 GMT, with a sharp drop expected in the headline number. The weak readings could accentuate the concerns over the US economic situation and re-fuel Fed rate cut bets. Oil traders will await the release of the US oil rigs count data due to be published by Bakers Hughes oilfield services company 1700 GMT.

Apart from the economic data, the focus will be on the UK PM May’s much-awaited resignation and the developments surrounding the US-China trade war.

EUR/USD: Focus on treasury yields and today’s close

EUR/USD looks set to put on a good show on the last trading day of the week, having charted a bullish engulfing candle on Thursday despite weaker-than-expected German and Eurozone data releases. 

GBP/USD: Less care for PM May’s resignation ahead of UK retail sales

GBP/USD trades modestly flat heading into London open, as investors care less for the UK Prime Minister Theresa May’s looming resignation amid expectations of a weaker UK retail sales report due later today.

UK Retail Sales preview: negative data likely to exacerbate Pound’s collapse

The UK is scheduled to publish its Retail Sales report for April this Friday at 8:30 GMT. According to preliminary estimates, sales are expected to have declined by 0.3% in April, after advancing 1.1% in March. 

US Durable Goods Orders Preview: Sentiment is not enough

Durable goods orders are predicted to fall 2.0% in April after rising 2.8% in March. Orders outside of the transportation sector are projected to be unchanged at 0.2%. 

 

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