Forex Today: Antipodeans cheer risk reset in Asia; Brexit talks in focus

Forex today in Tuesday’s Asian trading witnessed good two-way businesses, mainly driven by the prevalent risk environment and broad USD weakness. But most majors stuck to tight trading ranges amid a lack of fresh economic drivers and looming trade risks.

The Yen recovered some ground amid fresh US-EU tariff threats and Japanese sanctions on North Korea, having knocked-off USD/JPY back to 111.30/28 region. However, the downside was limited by a late-recovery in the risk sentiment, as reflected by a bounce in the Asian equities and Treasury yields. Amid risk reset, the Antipodeans also caught a fresh bid-wave and the Aussie jumped to hit fresh 2-week tops near 0.7140 levels, as upbeat Australian housing finance data continued to underpin. The Cable extended its bounce towards the 1.31 handle while the EUR/USD pair headed back to test the 2-week tops of 1.1275, unfazed by the tariffs talks.

The recovery in the risk sentiment towards late-Asia can be partly attributed to the ongoing bullish momentum around oil prices, as both crude benchmarks remain in close vicinity to 2019 tops amid ongoing Libyan civil unrest and expectations of tighter markets. Gold prices on Comex held onto the previous and traded near 1303 levels.

Main Topics in Asia

Australia: Housing finance ticks up in February - Westpac

Australia: Confidence falls following the Budget – ANZ

UK House of Commons accepts the final Lords amendment that prevents no-deal Brexit

Brexit talks between Labour and Tories will continue on Tuesday – The Guardian

US proposes tariffs on $11bn of EU products over Airbus subsidies - FT

Trump administration is baring 16 Saudis from U.S. for role in Khashoggi murder

Gold on the bids around $1300 as bulls concentrate more on geopolitics

Japan to extend its sanctions against North Korea for two years - Reuters

USD/IDR Technical Analysis: Symmetrical triangle in play, 14120 is the level to beat for bears

Japan's Motegi to travel to Washington from April 15-18 for trade talks

WTI Technical Analysis: RSI reporting overbought conditions near $64.75/80 resistance

Key Focus Ahead

We have yet another data-light European session ahead, with the second-tier Swiss jobs data eyed at 0545 GMT in absence of any first-tier macro news from both Euroland and the UK docket. Therefore, markets will continue to closely follow the latest developments surrounding the Brexit issue/ UK politics for fresh trading impetus.

The NA calendar also remains a thin-showing, as the US sees the only relevant release in JOLTS job openings for the month of February, dropping in at 1400 GMT ahead of the US API weekly crude stocks data due at 2030 GMT. Also, of note remains the FOMC member Clarinda’s speech heading into Wednesday’s key FOMC minutes release.

EUR/USD looks to regain 1.1275 amid weaker USD, eyes on ECB

Fresh bids emerged just ahead of the 1.1250 support area in early Asia, prompting a tepid bounce in the EUR/USD pair back towards the two-month tops of 1.1276. However, the bulls take a breather, as the rates consolidate near 1.1265 region heading into the European trading.

GBP/USD: Buyers aim for 1.3100 ahead of cross-party Brexit talks

Buyers welcome recent positive developments surrounding the Brexit but are yet to pass through the final results from the cross-party talks and the EU summit in order to maintain the grip.

The currency paralysis will continue until the US-China negotiations conclude

If the US/China trade talks result in an agreement the relief rally in the global economy will power equities and the dollar. But until the deal is announced there is no reason to take the US currency higher.

Don't Bet on a Bottom Yet in Euro

The focus this week will be on Europe. The European Central Bank has a monetary policy announcement on Wednesday and even though investors bid up EUR/USD today, the risk is to the downside. 

ECB: Expectations of an ultra-dovish outlook are fully entrenched – Societe Generale

Analysts at Societe Generale offer a brief preview of what to expect from this Wednesday’s European Central Bank (ECB) monetary policy meeting.