Forex Today: US dollar, Aussie weaker in Asia, a quiet session ahead
Broad-based US dollar weakness was the main underlying theme in Asia this Thursday, as markets sold-off the buck amid profit-taking ahead of the US tariffs deadline on the Chinese imports. The short-squeeze in the Euro and the GBP combined with the risk-recovery led to a broad-based sell-off in the greenback.
However, towards Asia closing, risk sentiment deteriorated, with the equities turning lower, led by the slide in the Australian markets. The latest reports that three Australian banks raised their mortgage rates hit the local equities and the AUD, as markets shrugged-off upbeat Australian trade data. Hence, the US dollar saw some fresh sign of life and embarked upon a tepid recovery-mode, capping the bounce in most majors heading into the early European trading.
Amidst commodities, gold traded mostly higher while oil prices traded modestly flat amid a renewed risk-aversion wave and a small drop in the US crude stockpiles.
Main topics in Asia
Fed's Bostic: risks to economy on upside and downside are almost perfectly in balance
We have had a series of Fed speakers coming forward this week and dove R. Bostic has come forward with a neutral outlook.
BoJ increases amount of JGB buys in today’s operation
The Bank of Japan (BoJ) increased the amount of the Japanese Government Bond (JGB) buying at today’s operation.
Australia's July trade surplus expands to AUD 1,551 mln, beats estimates
Australia's trade surplus expands to AUD 1,551 million in July from the June surplus of AUD 1,873 million, according to Australian Bureau of Statistics (ABS).
BoJ’s Kataoka: BoJ should expand stimulus to quicken achievement of price target
The Bank of Japan (BoJ) board member Goushi Kataoka is on the wires now, via Reuters, making some comments on the Japanese economy and monetary policy outlook.
South and North Korea announce September 18 – 20 Summit
Following the comments from the North Korean leader Kim Jon-Un, Reuters reports that South and North Korea announced a Summit meeting likely to be held later this month from Sept 18th – 20th.
Sterling seen at $ 1.37 in a year, but no-deal Brexit to sink it - Reuters poll
According to the latest Reuters poll of 50 foreign exchange specialists, a majority of them believe Cable to rise 6 percent to $ 1.37 in a year, but warn that it could sink if the UK sees a no-deal Brexit.
Gold rises for second day on USD weakness and rising demand from India
Gold is flashing green in Asia and is attempting a break above the psychological hurdle, possibly on the back of the losses in the US dollar.
Key Focus ahead
Today’s EUR macro calendar will kick-off with the Swiss Q2 GDP release due at 0545 GMT, followed by the German factory orders data due to be reported at 0600 GMT. In the European session, there are no first-tier economic news from the Euroland while the UK docket remains absolutely data-dry.
Ahead of the US open, markets will look forward to the US ADP employment change numbers for the month of August, dropping in at 1215 GMT. The US economy is expected to have added 109k new jobs last month versus 219k job additions seen previously. At 1230 GMT, we have parallel releases in the US jobless claims, productivity and Canadian building permits data. Meanwhile, the European Central Bank (ECB) Governing Council member Lautenschlaeger is scheduled to speak at 1245 GMT.
All eyes remain on the US ISM non-manufacturing PMI report due at 1400 GMT that sees a solid improvement in the US services sector activity in the month of August (56.8 expected vs. 55.7 last). At the same time, the factory orders will be also up for release. Later in the American afternoon, the EIA crude stockpiles data will be published at 1500 GMT.
Besides, a slew of speeches from the global central bankers is due on the cards, with the SNB Board member Zurbrugg’s speech due at 1630 GMT, BOC Wilkins’ at 1830 GMT and finally RBNZ Governor Orr will speak at 21.30 GMT.
EUR/USD: Falling Italy-German yield spread is EUR-positive, focus on US ADP data
If the European equities drop in response to escalating US-China trade tensions, then the EUR/USD may come under pressure. Further, the USD may pick up a bid if the US ISM non-manufacturing number and the ADP employment report paints a rosy picture of the US economy.
GBP/USD stuck in the middle with Brexit near 1.29
Thursday is a thin showing for the Pound on the economic calendar, and traders will be looking towards the upcoming US session, where Initial Jobless Claims (forecast 214 thousand, last 213 thousand) at 12:30 GMT and …
Details for the day ahead - TDS
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