Forex Today experienced a major turnaround in the risk sentiment after the European Union (EU) reached an agreement on the migration policy at the EU Summit. The Euro was the biggest beneficiary of the EU migration deal news while the risk/ higher-yielding assets such as Antipodeans, Asian equities also jumped on the back of a recovery in risk appetite. The USD/JPY pair also advanced towards 111 handle, but ran through offers at 110.80 supply zone, as upbeat Japanese data dump continued to lend a helping hand to the Yen. Meanwhile, the sell-off in the US dollar across the board also keep a check on the spot.
Among the commodities, both crude benchmarks traded on the back foot ahead of the US rigs count data while gold prices attempted a minor rebound above $ 1250 levels amid reduced demand for the greenback.
Main topics in Asia
Japan's Tokyo Consumer Price Index release came in better than expected, with Japan data coming in green across the board.
BOJ reduces purchase of JGBs with 5-10 years to maturity
The news is crossing the wires via Reuters that Bank of Japan (BOJ) has reduced purchases of Japanese Government Bonds with 5-10 years to maturity to JPY 410 billion from JPY 430 billion.
US steel companies battle over tariff relief - Reuters
As reported by Reuters, the US manufacturers and steel companies are battling it out over tariff exemptions from the US Commerce Department.
USD/CNH hits 7-month high of 6.6521
The USD/CNH (offshore Yuan exchange rate) rose to 6.6521 a few minutes ago - the highest level since November 14.
Source: EU leaders agree to extend economic sanctions against Russia for six months - Reuters
Reuters quoted a source citing that the European leaders have agreed to extend the economic sanctions against Russia for six months at the EU Summit.
EUR/JPY gallops to 129.10 on EU immigration deal news
The cross in the EUR/JPY received the much-need booster shot and jumped more-than 100-pips following the news that the European Council (EUCO) reached the all-important EU immigration agreement, which rescued the EUR bulls.
Theresa May: Want a Brexit that will work for both EU and UK
The UK PM Theresa May is on the wires now, via Reuters, urging for a Brexit deal that is in the interest of both the UK and European Union (EU).
Key Focus ahead
After a volatile Asian session, markets look forward to the EUR calendar to offer further trading momentum, with Germany’s retail sales and jobs data in focus ahead of a slew of the UK economic data. The UK sees the releases of the current account, final GDP and mortgage approvals data, followed by the Eurozone flash CPI estimate. The bloc’s flash CPI is expected to come in at 2.0% y/y in June versus 1.9% last while the core CPI is seen easing to 1.0% y/y versus 1.1% previous.
Moving on, the US docket offers the Core PCE price index, personal spending and revised UoM consumer sentiment data. Also, of note remains the Canadian GDP report that will hog the limelight ahead of the Bank of Canada (BOC) Business Outlook Survey.
EUR/USD rises on the EU migration deal, focus on inflation differential
The EUR/USD pair jumped 83 pips to a high of 1.1650 in Asia as the European Union (EU) leaders reached an agreement on migration. Had the EU summit failed to reach consensus, the EU's unity would have likely shattered.
GBP/USD trying to vault over 1.31 ahead of UK GDP figures, US consumption expenditure for Friday
Friday brings GDP figures for the UK, dropping at 08:30 GMT and the y/y GDP for the first quarter is expected to hold steady at 1.2%. Mortgage Approvals will also be dropping at the same time.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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