BoE Rate Decision

Forex today in Asia was characterized by a better risk environment, fuelled by renewed optimism over the US-China trade talks. News that the Trump administration has reached out to China for a new round of trade talks raised hopes a deal could be struck in the bitter tariff dispute between the world’s two biggest economies and weighed down on the US dollar across the board.

The Euro is trading at 1.1624, extending its gain this week while the Yen weakened slightly on Thursday to 111.43 per dollar on easing trade worries. Sterling reached a near six-week high of 1.3087 as Brexit-supporting lawmakers in British Prime Minister Theresa May’s party publicly pledged support for her to stay in power. Both the EUR and the GBP remained flat in the Asia session, awaiting the key central bank meetings that will offer fresh trading impetus across the forex space.

Thursday will see major fundamental information for GBP at 11:00 GMT with the Bank of England (BoE) interest rate decision and BoE minutes. Later the European Central Bank (ECB) Monetary policy statement and press conference at 12:30 GMT will see markets focusing on the staff economic projections, after Bloomberg reported yesterday that the ECB is likely to slightly lower the economic growth projections. At 12:30 GMT, the US Consumer Price Index (CPI) is also expected to move the market a great deal and might reinforce the calls for faster Fed rate hikes. The US docket also sees the release of the weekly jobless claims among other minority reports. Besides, the speeches by the FOMC members Quarles and Bostic will also grab some attention later today.

Oil prices slid on Thursday morning in Asia, despite shrinking crude inventories in the U.S. reversing some of the strong gains from the previous session, as economic concerns raised doubts about ongoing fuel demand growth. The falls came on the back of a potential slowdown in fuel demand growth because of trade disputes between the United States and China as well as emerging market turmoil.

Gold prices fell marginally in early morning trade in Asia, modestly giving up some sharp gains it scored during the U.S. trading session overnight. The slide was a small reversal from a spike overnight during the U.S trading when gold futures jumped more than $11.