The US dollar held its upside momentum and clung onto two-week highs vs. its main competitors so far this Tuesday, as the renewed trade concerns over the US-Mexico steel tariffs and Japan-South Korea export curbs dented the risk sentiment. The Asian equity markets dropped, although the Japanese stocks bucked the trend amid the recent Yen weakness. The US equity futures also extended losses while the Treasury yields were on the defensive.
USD/JPY hit fresh six-week tops at 108.89 but failed to sustain at higher levels amid a renewed risk-off wave, while EUR/USD held onto the 1.12 handle while the GBP/USD failed to defend the 1.2500 support amid a lack of clarity on the Brexit issue and ahead of the Fed Chair Powell’s speech.
We have a data-sparse EU macro calendar for today, therefore, the European traders will keep an eye on the Brexit and trade-related development for fresh trading impulse.
In contrast, the NA session looks eventful, despite an absence of the first-tier macro data from the US, as a string of the US Federal Reserve (Fed) officials are scheduled to speak today. The main event risk is likely to be speech by the Fed Chair J. Powell at an event hosted by the Federal Reserve Bank of Boston. Markets will pay close attention to his remarks on the Fed’s interest rates and economic outlook for fresh dollar trades. The speeches by the Fed officials Bullard, Quarles, Bostic will be also closely heard.
On the data front, the US JOLTS job openings data and API crude stockpiles report will be published at 14:00 GMT and 20:30 GMT respectively.
Oil prices dipped on Tuesday on demand concerns following the latest signs the U.S.-China trade war is dragging on the global economy, although the potential for conflicts in the Middle East offered support.
Gold prices slipped below the $1,400 level on Tuesday ahead of speeches by multiple U.S. Federal Reserve officials in the next couple of days.