Forex Today: RBA’s status-quo powers Aussie; focus on UK PMI, trade
Tuesday’s Asian session was a mixed bag, as a sense of caution prevailed amid renewed trade concerns. Asian stocks slipped following the overnight Wall Street after US President Trump announced fresh tariffs on steel from Brazil and Argentina.
The US dollar embarked upon the road to recovery vs. its main competitors but remained miserable against the Antipodeans. The Aussie rallied to three-week highs near 0.6850 after Reserve Bank of Australia’s (RBA) announced no change to its Official Cash Rate (OCR). The Kiwi tracked the Aussie’s rally and regained the 0.65 handle.
The USD/JPY pair benefited from broad dollar recovery, an uptick in S&P 500 futures and the Treasury yields rebound. The spot kept its range around 109.15 region, reversing a dip to four-day lows of 108.93. The Canadian dollar attempted a tepid recovery and sent USD/CAD back in the red zone near 1.3300. Moderate gains in oil prices also aided CAD recovery.
Amongst the European currencies, EUR/USD consolidated the recent upsurge near 1.1070 levels while GBP/USD traded little changed below 1.2950 ahead of the UK Construction PMI release.
Main Topics in Asia
Interest rates and quantitative tightening wrong from the first days of Jay Powell - Trump
US Pres. Trump: Fed should lower rates, dollar is very strong
Japan govt considering 25 trillion yen economic stimulus package - NHK
Japanese Economic Minister, Nishimura: Consumption is still at a low level
Australia: Back to back current account surplus – Westpac
BOJ’s Kuroda: Important to strike the right balance between growth and fiscal discipline
China may ban all US diplomatic passport-holders from Xinjiang - Global Times
Asian stocks drop on trade concerns, potential double top on Nikkei
RBA leaves rate unchanged at 0.75%
RBA: Rates to remain low for extended period
Japan PM Abe: Japan is in the final stages of preparing economic stimulus package
N. Korean ForeignMin: Up to the US what Christmas gift it will select to get - KCNA
Key Focus Ahead
The EUR macro calendar this Tuesday is a thin-showing, in absence of first-tier economic data releases. Therefore, the Swiss Consumer Price Index (CPI), UK Construction PMI and Eurozone Producer Price Index (PPI) will keep the traders busy in the session ahead. Meanwhile, the UK political drama and trade-related headlines will continue to play out.
The NA session also lacks relevant macro news from both the US and Canada. However, New Zealand’s fortnightly dairy auction results (due around 1430 GMT), ECB Governing Council member Coeure’s speech and weekly US Crude Stocks data from the American Petroleum Institute (API) will be closely eyed.
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