North Korea fired another missile over Japan and raised investors concerns over geopolitical risks, eventually reviving safe-haven demand during early Asian session on Friday. Following a knee-jerk reaction, the USD/JPY pair quickly recovered back above the key 110.00 psychological mark as the greenback remained underpinned by Thursday's stronger-than-expected US CPI print for August, which could have raised expectations for an additional Fed rate hike action by the end of this year.
CPI raises rate hike expectations - ANZ
Analysts at ANZ explained that for those, including a number of FOMC officials, that felt that the recent waning in US inflation was a transitory story, the August CPI will provide some relief.
Main topic in Asia
North Korea has launched a missile - BNO News
North Korea has launched a missile. Japan has issued an emergency alert, warning residents to seek shelter immediately.
North Korea warns US of stronger self defense actions
Rodong Sinmun that Kim Jong Un may take stronger self defense action if US continues current course.
Japan PM Abe: Calling on UN to hold emergency security council meeting
North Korea's latest misadventure has not gone down well with the Japanese government.
USD/JPY bulls fought back to the 110 handle despite N.Korea risk
USD/JPY gave some profits to the bears in early Asia when the N.Korean news crossed the wires, sending the usual safe haven suspects loose and seeing territory in the yen up to 109.55 vs the greenback before bouncing back.
AUD/USD struggles to regain 0.80 on US inflation surprise
The North Korea news did rock the US dollar during the overnight trade, however, the US inflation surprise ensured the 0.80 handle becomes a tough nut to crack.
NZD/USD: a week is a long time in politics, but... - ANZ
Analysts at ANZ explained that they say a week is a long time in politics, "but it is clearly a long time in FX markets too", they said, with the NZD back under pressure again as local political polls whipsaw.
Key Focus ahead
Meanwhile, the GBP/USD pair held on to previous session’s hawkish BoE-led strong gains to fresh one-year highs as investors' focus now shifts to another big day of US macro data, including the key monthly retail sales, manufacturing data and Prelim UoM Consumer Sentiment index.
BoE made it reasonably clear, rates will rise – ANZ
Analysts at ANZ explained that the BoE made it reasonably clear that it could be joining the Fed and BoC in withdrawing policy stimulus shortly as inflation starts to supplant Brexit on its list of worries.
GBP/USD: Bulls losing steam on North Korea-led risk-aversion?
The GBP/USD pair paused its BOE-inspired rally just ahead of 1.34 handle and consolidated almost throughout the Asian trades below the last, as markets digest the overnight North Korea news heading into the key US retail sales and industrial production data due later on Friday.
Key US retails sales outlook - Nomura
Analysts at Nomura offered their outlook for the key US retail sales.
US Industrial Production preview - Nomura
Analysts at Nomura offered their outlook for the day's data ahead in US Industrial production.
University of Michigan consumer sentiment preview - Nomura
Analysts at Nomura noted the University of Michigan consumer sentiment coming up as a key event in the US shift.
Ahead of the US data, ECB speakers might influence sentiment around the shared currency and provide some short-term trading impetus during early European trading session.
EUR/USD: Downside back in play ahead of US data?
The EUR/USD pair stalled its relief-rally just below the key resistance located near 5-DMA at 1.1928 levels, as attention turns towards the crucial US retail sales and industrial production data for the next direction.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.