Forex today witnessed softer risk tones, as the bid tone around the US dollar across its main competitors weakened in the European trading. The GBP/USD pair is pushed back above the midpoint of the 1.31 handle and the Yen remained better bid against the US dollar near 111.80 levels. Meanwhile, the EUR/USD pair traded with a bearish leaning just under the 1.13 handle, as investors favoured the dollar amid mixed Asian equities and China growth concerns.
During the European session, markets eagerly await the outcome of the further Brexit negotiations between Britain’s top government officials and the EU’s Chief Brexit Negotiator Barnier, as both the sides try the last effort to clinch a Brexit deal. Therefore, the forex space will be driven by Brexit updates, USD dynamics and the sentiment on the European equities amid a data-dry EUR calendar. However, the speech by the BOE MPC member Cunliffe’s speech will be eyed at 12:15 GMT for some GBP moves.
The US ADP jobs report will hog the limelight pre-US open at 13:15 GMT, soon followed by the US trade data releases at 13:30 GMT. Oil traders will also look forward to the EIA crude stockpiles data due at 15:30 GMT for any impact on oil prices. Later, around 17:00 GMT, the speeches by the FOMC member Williams and BOE MPC members Saunders will remain in focus ahead of the Fed’s Beige book release at 19:00 GMT.
Oil prices continued to slip on Wednesday, as U.S. producers forecast an increase in output and larger-than-expected crude stockpiles. U.S. oil giants Chevron and Exxon Mobil said on Tuesday that they each plan to churn out close to 1 million barrels of shale oil per day in the Permian Basin, one of the most prolific oil basins in the U.S. This could potentially allow the two largest oil companies in the country to dominate the West Texas and New Mexico field in the next five years.
Gold is struggling to find a firm direction, side-lined below $1290 level, as modest pull-back in equity markets revived demand for traditional safe-haven assets and assisted the precious metal to build on the overnight late rebound from over one-month lows. The uptick, however, lacked any strong bullish conviction and quickly ran out of steam near the $1290 area amid follow-through US Dollar strength to near two-week tops.