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Forex Today: Kiwi – weakest in Asia amid risk-off; UK retail sales, BOE - key

A renewed risk-aversion wave gripped the financial markets across Asia this Thursday, and hence, the traders sold-off the risk assets such as the Asian equities, oil, Treasury yields and the Antipodeans. Across the fx board, the Kiwi emerged the weakest near 0.6720, having faced a double whammy from dismal NZ Q3 GDP figures and risk-off market profile. The Aussie dropped back below the 0.71 handle amid an unexpected rise in the Australian jobless rate while the Yen benefited from BoJ’s intact view on the Japanese economic recovery, despite rising global risks. As a result, the USD/JPY pair ran into fresh offers in a bid to test the 112 handle.

Among the related markets, both crude benchmarks are down nearly 2% while the 10-year Treasury yields slipped -0.80% alongside a 1% drop in the US equity futures. Meanwhile, the Japanese benchmark, the Nikkei 225 index, slumped 3.40% to 20,800 levels, leading the declines in its Asian peers. Gold prices on Comex failed to benefit from the risk-off trades and traded weaker below the 1250 barrier.

Main Topics in Asia

Australia adds 37 thousand jobs, Unemployment Rate ticks up to 5.1%

World Bank: China growth to hit 6.2% in 2019 - Reuters

HKMA warns of increasing downside risks to the economy

Gold: Bearish outside-day makes today's close pivotal

PBOC leaves short-term interest rates unchanged

Chinese tax official: China is reportedly assessing a new and substantial tax cut - Reuters

BoJ leaves policy unchanged, as widely expected

Oil recovery vanishes, WTI falling back into $47.00

US Senate passed a stopgap funding measure to avert shut down

US 10-year yield hits 8-month low despite hawkish Fed hike

Key Focus Ahead

Markets gear up for a busy European session ahead, with the UK retail sales at 0930 GMT and the Bank of England (BOE) monetary policy announcement and the minutes release at 1200 GMT. Ahead of the UK events, the Swiss trade data will be published at 0700 GMT and the Eurozone current account numbers will drop in 0900 GMT, both of which are likely to have virtually no impact on the markets.

In the NA session, the usual weekly jobless claims from the US will be released at 1330 GMT, parallelly we will see the release of the Canadian ADP jobs and wholesale sales report.

EUR/USD: Renewed fears of curve inversion may weigh over the greenback

Technically speaking, the EUR/USD pair still lacks clear direction and a bull breakout would be confirmed if and when the pair closes above the 55-day EMA, currently at 1.1408.

GBP/USD struggling to build a base above 1.2600 ahead of BoE, UK Retail Sales

At 09:30 GMT the UK's annualized Retail Sales for November are forecast to come in at 1.9% (last 2.2%), while 12:00 GMT has the BoE dropping their latest MPS along with their interest rate decision.

UK retail sales Preview: Black Friday online sales keep traditional sales weak ahead of Christmas

Total UK retail sales are expected to rise 0.3% m/m in November with core sales excluding motor fuel sales seen rising 0.2% m/m as the trend from online sales madness on Black Friday indicate changing mood. 

The Bank of England Preview: The Bank rate set to remain on hold amid Brexit uncertainty peaking

The Bank of England Monetary Policy Committee is expected to hold the Bank rate steady at 0.75% on the December policy meeting amid slowing inflation and peaking Brexit uncertainty.


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