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Forex Today: Yen recovers amid US-China trade talks; UK earnings, German ZEW eyed

Forex today witnessed a cautious trading in Tuesday’s Asian session, despite revival of trade talks between the US and Chinese officials, as French and UK political uncertainty dented the overall market sentiment. Further, weaker fundamentals also capped the upside in the higher-yielding currencies, with the Aussie capped near 0.7210/15 region while the Kiwi remained capped by the 0.69 handle. The Yen recovered ground versus its American counterpart, knocking-off the USD/JPY pair to the 113 level, tracking price-action in the US dollar index.

The Asian equity markets traded mostly mixed, on a cautious footing while both crude benchmarks traded modestly flat. Gold prices on Comex regained the 1250 barrier amid increased demand for the safe-havens.

Main Topics in Asia

The UK Times: Another key MP delivers no-confidence letter - Reuters

UK businesses frustrated by Brexit delay - British Chamber of Commerce

Source: Trump concerned about being impeached, sees it as a 'real possibility - CNN

China Vice-Premier Liu, US Trade Secretary and Trade Representative exchanged opinions on trade

Japan’s Aso: Agreed with the US that forex will be discussed with Mnuchin

Gold is regaining poise in Asia, rising call demand suggests more gains ahead

Oil markets restrained, WTI stuck near $51.00

Topix Technical Analysis: Index hits lowest since June 2017 after flag breakdown

Reserve Bank of India sells the US dollars circa 72.35, Rupee rebounds

Sources: Mnuchin, Lighthizer, Liu discussed changes to fundamental Chinese policies - WSJ

Key Focus Ahead

We have a busy EUR macro calendar this Tuesday, with the UK jobs and wages figures to headline. The UK labor market report will be published at 0930 GMT, which is likely to show the average earnings steadying in the month of October. The German and Eurozone ZEW survey will drop in at 1000 GMT, which is likely to have a major impact on the common currency, especially after the Eurozone Sentix investor confidence fell to a 4-year low on Monday.

In the NA session, the US Producers price index (PPI) will hog the limelight among a cou8ple of minority reports. The Canadian docket remains data-empty. However, the CAD and oil traders could pay close attention to the US API weekly crude stocks data due on the cards at 2130 GMT.

Apart from the data, the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr is expected to testify on the central bank’s annual report at 1915 GMT later on Tuesday.  

EUR/USD: Trapped in a narrowing price range, Trump impeachment fears may hurt US dollar

The EUR/USD pair created a bearish outside reversal on Monday and failed to pierce the upper edge of the symmetrical triangle on renewed Brexit uncertainty.  

GBP/USD to face earnings data with Brexit vote off the table

Key UK data will be dropping early in the London market session, with Average Earnings, ILO Unemployment, and Claimant Counts all dropping at 09:30 GMT.

The UK wage Preview: With no-deal Brexit looking increasingly likely, the UK real pay increase is set to diminish

The aggregate picture of the UK labor market is expected to confirm a solid pickup with the unemployment near a four-decade low and UK wages rising well above the inflation rate …

UK PM Theresa May’s Office: May to meet Merkel on Tuesday to discuss Brexit

The UK PM Theresa May’s Office issued a statement earlier today, citing that May is likely to meet with the German Chancellor Angela Merkel to discuss the Brexit deal.


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