Amid ongoing Hong Kong violence and dimmed US-China trade deal prospects, the risk-off sentiment is the main underlying theme this Wednesday. The US dollar traded modestly flat against the Euro, the Yen having ignored the rise in the US Treasury yields.
USD/JPY hovered in a 25-pips narrow range around the 200-DMA at 109.03, with the upside limited by the losses in the Asian equities and US equity futures. EUR/USD pair defended the 1.1000 handle, but the bounce appeared shallow amid weaker Chinese Yuan and Euro area growth concerns. GBP/USD kept its range around the midpoint of 1.28 the handle ahead of the key UK inflation data.
A busy day ahead, in terms of the economic data/ events, as markets gear up for day 1 of the Fed Chair Powell’s testimony, due later in the American mid-morning at 16:00 GMT, especially after the Trump disappointment on trade. Also, in focus remains the speech by the Fed officials Barkin and Kashkari that will follow Powell’s.
On the data front, the CPI reports from both the UK and US will hog the limelight in the EU and NA session respectively. Meanwhile, the second-liner German Final CPI and Eurozone Industrial Production data will be also watched alongside any fresh developments on the US-China trade issue and UK politics. Towards the NY closing, the weekly US Crude Stocks data will be published at 21:30 GMT, by the American Petroleum Institute (API).
Oil is seen extending its overnight softer tone into early session, uninspired by a lack of fresh updates on the US-China trade deal from the US President Trump.
Although pessimism surrounding the US trade relations with China and the EU, coupled with Hong Kong protests, favoured Gold to bounce off multi-month lows, prices are again under pressure while taking rounds to $1,460 during Wednesday’s session.