Forex today witnessed a turnaround in the risk sentiment, as markets turned cautious and faded the early optimism induced by receding Hard Brexit fears and US-China trade talks.
The Japanese Yen recovered ground and turned positive, in response to fresh selling seen in the Asian equity markets and Treasury yields. The USD/JPY pair traded in a narrow range below mid-111s, with the bias leaning towards the downside. Both the European currencies, the EUR and the GBP, traded better bid on the back of a broadly subdued US dollar, Brexit optimism and stronger Eurozone data.
In the meantime, the risk trends will be driven by fresh Brexit-related developments, as markets await more clarity after the European Commission President Juncker rejected the UK PM May’s appeal for a short Brexit delay and speaker Bercow stopped the indicative votes next week.
The minutes of the last ECB meeting are due today at 11:30 GMT, with focus squarely on discussions about the insufficient growth forecasts. There are more US Jobs Data releases today at 12:30 GMT ahead of tomorrow’s nonfarm payroll report. All eyes remain though are on further US-China trade talks, as the US President Trump meets with the Chinese Vice Premier Liu He at the White House later today at 20:30 GMT.
Oil is currently flatlined at $62.27 per barrel, having hit a 4.5-month high of $62.94 on Wednesday. The bid tone weakened in the US session yesterday after the Energy Information Administration reported an inventory increase of 7.2 million barrels for the week to March 29 rather the 2.8-million-barrel build expected. Also, the positive signs in the Sino-U.S. trade front eased concerns over the potential negative impact on oil demand from the world’s two biggest oil importers.
Gold prices edged up a bit on Thursday as a weaker-than-expected U.S. payroll data outweighed optimism surrounding U.S.-China trade. The disappointing data added to concerns of slowing U.S. economic growth and lifted prices of the safe-haven gold.