Forex today witnessed moderate risk-aversion in Thursday’s early trading, as the sentiment soured following the reports that the US-China trade talks could be delayed by the US government shutdown, while looming Brexit uncertainty also left markets scrambling for safety bets.
The Yen picked up bids and bounced-off two-week lows against its US counterpart, keeping the USD/JPY pairing on the back foot near the 109.00 handle. Both the Euro and the GBP traded flat, leaning to the downside, as the Dollar remained better bid across its main competitors. The focus will be back on the fundamentals, with the Brexit vote and UK PM May’s leadership challenge now out of the way, although the Brexit-related headlines will continue to drive the sentiment around the major European currencies.
Today’s EUR macro calendar sees the releases of the Eurozone final CPI at 10:00 GMT alongside the Eurozone construction output numbers. Meanwhile, the UK economic calendar remains absolutely data-empty, with traders focusing entirely on Brexit headlines regardless.
The NA session offers plenty of event risks, including the US weekly jobless claims and Philly Fed manufacturing index, all of which will be released parallelly at 13:30 GMT. Later in the American mid-morning, the speech by the FOMC member Quarles will be released at 15:45 GMT. The US government shutdown will continue to remain a drag on the broader market sentiment.
Oil prices have gone cautious for Thursday, with crude oil ticking down towards 51.80 on rising US stock supplies. Although demand for crude oil continues to rise, energy traders are concerned that the pace of demand growth may not be enough after US gas reserves grew by more than was expected. US crude oil production also ticked into a new all-time record, hitting 11.9 million barrels per day, with barrel exports also reaching record highs of 3 million barrels per day.
Gold prices remained above 1,290.00 level, currently trading at 1,292.50. U.K.’s political and economic problems and the no-confidence vote on Prime Minister Theresa May after her failed Brexit deal, pushed the yellow metal higher, even with China’s attempts to steady its economy tamping down safe havens. Since failing to surpass the $1300 mark earlier in January, Gold price have been fluctuating in a tight range and today’s price action is no different.