Forex Today: Yuan stabilizes, Aussie firmer on RBA’s status-quo; a quiet session ahead
A major turnaround in the risk sentiment amid a recovery in the Chinese Yuan, saw a brief rebound in the risk assets across the board. USD/JPY witnessed a sudden spurt of buying and regained 107 handle, but lacked follow-through amid ongoing US-China trade war.
The Antipodeans also bounced amid risk reset and upbeat macro news while a status-quo maintained by the Reserve Bank of Australia (RBA) further helped keep the recovery gains intact around the Aussie. The AUD/USD pair stayed below the 0.68 handle. The Kiwi, on the other hand, trimmed upbeat jobs-data led gains to trade near 0.6530 levels amid New Zealand’s falling inflation expectations. The Chinese Yuan retreated from record low amid PBOC intervention that lent some support to the Asian equities.
Among the commodities, gold reversed sharply from YTD tops of 1475 levels while both crude benchmarks bounced in tandem with Treasury yields and US equity futures, as the risk sentiment improved ahead of the European open.
Main Topics in Asia
US-China Trade Updates
US Treasury designates China as a currency manipulator, USD/JPY declines
USD/CNH: Yuan hits fresh record low in offshore markets
US should take responsibility for China stopping US agricultural imports - Xinhua
China Foreign Ministry Official: China will be forced to take countermeasures if the US deploys intermediate-range missile in Asia
China to sell Yuan bills in Hong Kong on Aug. 14, CNH recovers
One-month HIBOR jumps 50 basis points
Other Key Headlines
North Korea: US and South Korean joint military drills violate agreement
New Zealand unemployment data beats expectations, NZD rallies 0.7%
Japan Defence Min: North Korean projectiles are a grave threat
Gold nears $1475 as bulls keep benefiting from risk aversion
Australia’s June month trade balance beat the forecast, Aussie up
WTI bounces off 8-month old support-line despite trade pessimism, geopolitical tension
Bank Indonesia to intervene in FX, buy bonds 'massively' to support Rupiah
RBNZ Survey: New Zealand inflation expectations fall in Q3, Kiwi loses 15-pips
Key Focus Ahead
A data-light European calendar kicks-off with the German Factory Orders data due at 0600 GMT, with nothing of note to be reported from the UK docket. Therefore, Brexit/ UK political headlines will continue to grab attention amidst trade-related news-driven risk sentiment.
In the NA session, the US JOLTS Job Openings and NZ GDT Price Index will be published at 1400 GMT. Meanwhile, the speech by the FOMC member Bullard is due at 1600 GMT and American Petroleum Institute (API) Weekly Crude Oil Stock report will drop in at 2030 GMT.
When are the German Factory Orders and how could they affect EUR/USD?
EUR/USD is looking north ahead of German factory orders data, having charted a bullish hammer reversal on the daily chart earlier this week. A big-beat on German factory orders data would bolster the bullish technical setup and allow a quick move to 1.1250.
GBP/USD remains on the road to recovery, ignores no-deal Brexit concerns
Despite looming hard Brexit concerns, the GBP/USD pair recovers. Speculations concerning no-confidence motion against the UK PM fail to stop him from supporting no-deal Brexit. Investors may keep an eye over macro news/headlines for fresh direction.
3 Currency War Means - Dow Plunges Over 700 Points on Currency Wars - Got Gold?
The market seems to fear currency wars. At least that is how mainstream media views things. Actually, currency wars have been going on for decades disguised in other forms.
Goldman Sachs predicts additional Fed rate cut
Goldman Sachs sees 75 percent chance of the Fed reducing rates by 25 basis points in September and puts the odds of another rate cut in October at 50 percent.