Forex today steadied following a volatile start, with improved risk sentiment dominating, despite a weaker Yuan fix by the PBOC and weekend’s fresh US-China trade comments by the US President Trump. The Asian markets traded firmer alongside the Treasury yields while the US dollar traded with caution vs. its main competitors after a sharp downward in early thin trading.
Amongst the major currencies, the Yen was the best performer, having sent the USD/JPY pair to 105.31 lows before recovering to 105.50 region. EUR/USD is now accelerating the downside after breaking below the 1.1200 handle at the beginning of the week. GBP/USD paused the early declines ahead of the 1.20 handle, but remains vulnerable, as heightened no deal Brexit risks continue to weigh.
A quiet start to a busy week ahead, on the economic news front, with an empty docket on both sides of Atlantic this Monday.
The main focus will remain on the US-China trade-related headlines, UK political developments for fresh trading impetus in the week ahead. Oil prices fail to extend the previous run-up while trading near $54.30 into the European traders’ return from the weekend on Monday, despite geopolitical tensions.
Gold prices treaded water below $1,500 levels, at $1,490 amid mixed cues and ahead of key US macro data in the week ahead.