Forex today witnessed a turnaround in the risk sentiment amid the recent reports over the US-China trade progress. The renewed risk-aversion wave crimped the USD rally and sent it lower across the board, boosting the sentiment around its major rivals.
The Pound was the early mover and the biggest gainer in Asia, following the reports that the Northern Irish DUP will conditionally back the UK PM May’s Plan B Brexit deal. The GBP/USD pair rallied the best levels seen since November 2018 near 1.3140.
Euro also corrected dovish-ECB led sell-off and traded near 1.1325 region. Dovish Draghi has likely put the EUR/USD pair on the path to a sustained break below 1.13. On Thursday, the European Central Bank (ECB) kept key rates and forward guidance unchanged but downgraded its assessment.
The USD/JPY pair bounced-off lows near 109.50 and headed back towards 110.00, as the JPY bulls were offered a little reprieve from upbeat Tokyo core CPI figures.
After an eventful EUR calendar a day before, Friday’s session remains relatively light, with markets bracing for the German IFO survey at 09:00 GMT, followed by the UK BBA mortgage approvals and CBI realized sales report due at 09:30 GMT and 11:00 GMT respectively.
The NA also has no significant macro updates on the cards from the US and hence, the US-China trade talks and Brexit developments will continue to drive the broader market sentiment. Meanwhile, the NA traders may receive some trading incentives from the Baker Hughes oil rigs count data at 18:00 GMT and the monthly budget statement release at 19:00 GMT.
Oil prices rose by more than one percent on Friday as turmoil in Venezuela triggered concerns that its oil exports could soon be disrupted. Washington on Thursday signalled it could impose sanctions on Venezuela’s crude exports as Caracas descends further into political and economic turmoil. Fundamentally, however, global oil markets are still well supplied, thanks in part to surging output in the United States.
Gold has reversed its losses in the Asian session, after prices slumped to their lowest level of the year on Thursday, as future prices hit their weakest level since Dec. 27 at $1,275.65 a troy ounce. gold futures last traded at $1,284.60.