Forex Today: Yen advances further; UK Jobs, Yellen, BOC up next

Forex Today: Yen advances further; UK Jobs, Yellen, BOC up next

12 July 2017, 08:03
Roman Vashchilin

Trump Jr email release led broad USD weakness and risk-aversion extended into Asia on Wednesday, with the Yen’s recovery gaining momentum into a second day versus its American counterpart.

The Emerging Market currencies such as the Aussie and Kiwi derived support from weaker Treasury yields amid dovish Fedspeaks. Meanwhile, the EUR/USD pair hovers near 14-month tops of 1.1484, as monetary policy divergence narrows.

Main topics in Asia

Fed's Mester: I'm still viewing the economy as on track for that gradual pace of funds rate increases

During an interview with The Wall Street Journal, Cleveland Fed's President Loretta Mester stated that she's still viewing the economy as on track for that gradual pace of funds rate increases.

Trump seen replacing Yellen with Gary Cohn – Politico

Politico reported on Tuesday that President Trump is increasingly unlikely to nominate Yellen next year for second term and could replace her with National Economic Council Director Gary Cohn.

Australia's consumer sentiment remains soft - Westpac

The Westpac Melbourne Institute Index of Consumer Sentiment rose by 0.4% in July from 96.2 in June to 96.6 in July

BoJ boosts bond purchases in 3-5 year window

The Bank of Japan (BoJ) is offering to buy JPY 330 billion in the 3 to 5 year window compared to the previous purchases of JPY 300 billion. 

Key focus ahead

Looking ahead, we have an eventful economic calendar ahead, with the UK employment data to be released in the European session, followed shortly by the Eurozone industrial production figures. The UK labour market report is expected to show a downtick in the hourly wages accompanied by an increase in the claimant count change. Meanwhile, the Eurozone industrial production is expected to increase by 1.0% in the reported month versus 0.5% last.

Later in the NA session, we have the BOC monetary policy decision due to be announced at 1400GMT and accompanied by the July Monetary Policy Report. The Canadian central bank is widely expected to keep rates-on hold today, while leaving doors open for rate hikes in the coming months. Also, of significance will be Fed Chair Yellen’s testimony before the lawmakers today, as markets eagerly await some clarity on the rate hike outlook this year, especially after contrasting Fedspeaks lately. Data-wise, the US EIA crude stockpiles report will be published ahead of the Fed Beige book in the US session.

Relevant news day ahead

GBP/USD: Downside opening up towards 1.2800 ahead of UK jobs?

The GBP/USD pair extended its bearish consolidation phase near two-week lows in the Asian trades, as investors remain on the back foot ahead of the UK employment data and Fed Chair Yellen’s testimony due later today.

EUR/USD at 14 month highs, Will Yellen testimony lead to a steeper yield curve?

EUR/USD rallied to 1.1480 on Tuesday and extended gains to a 14-month high of 1.1484 in the Asian session today as the German bond yields resumed the rally,

3 Keys things to look for in Yellen's testimony - BAML

Analysts at Bank of America Merrill Lynch (BAML) published a brief preview of key things to look for in the Fed Chair Yellen’s testimony the House Financial Services Committee on Wednesday and Senate Banking Committee on Wedneday.

BOC rate decision: Sell the fact in CAD?

The Bank of Canada (BOC) rate decision is due at 14:00 GMT today. Economists stand divided on whether the central bank will hike rates for the first time in nearly 7 years.

US Fed issues its Beige Book on economic condition

The Beige Book reports on the current US economic situation. Through interviews with key business contacts, economists, market experts, and other sources are gathered by each of the 12 Federal Reserve Districts. 

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