Talking Points:
- Yen gains, commodity currencies drop on renewed trade war jitters
- Euro[1] unlikely to find follow-through in revised Eurozone GDP data
- Stock index futures down, hinting risk aversion is likely to continue
The Japanese Yen[2] outperformed in Asia Pacific hours as trade war jitters darkened the markets’ mood anew[3], sending regional stocks lower and offering a lift to the standby anti-risk currency. The similarly-minded Swiss Franc also rose. Sentiment-geared commodity bloc currencies bore the brunt of selling pressure.
The Australian Dollar[4] saw losses amplified by disappointing local GDP data[5]. The Canadian Dollar[6] competed vigorously for the dubious honor of the day’s weakest G10 FX unit. Sheer proximity to the US seems to have become a liability as the tone of the Trump administration turns increasingly protectionist.
Looking ahead, the European data docket offers little that might inspire fireworks. The final revision of fourth-quarter Eurozone GDP figures will cross the wires. Absent a major deviation from earlier estimates, the Euro seems likely to look past the outcome, focusing on the upcoming ECB policy decision[7] instead.
Absent a potent-enough driver from scheduled event risk, broadly based sentiment trends will probably remain at the forefront. Futures tracking the benchmark S&P 500[8] stock index are pointing sharply lower, hinting that a “risk-off” mood is likely to prevail as day wears on.
Investors’ heightened headline sensitivity ought to be kept in mind however. A mere comment from US House of Representatives Speaker Paul Ryan opposing Trump-back tariffs was apparently sufficient to throw markets back into “risk-on” mode[9] yesterday. Something similar may yet transpire in coming hours.
See our free guide to learn how to use economic news in your trading strategy[10]!
Asia Pacific Trading Session
European Trading Session
** All times listed in GMT. See the full economic calendar here[11].
FX TRADING RESOURCES
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak[12] on Twitter
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References
- ^ Euro (www.dailyfx.com)
- ^ Japanese Yen (www.dailyfx.com)
- ^ trade war jitters darkened the markets’ mood anew (www.dailyfx.com)
- ^ Australian Dollar (www.dailyfx.com)
- ^ disappointing local GDP data (www.dailyfx.com)
- ^ Canadian Dollar (www.dailyfx.com)
- ^ upcoming ECB policy decision (www.dailyfx.com)
- ^ S&P 500 (www.dailyfx.com)
- ^ throw markets back into “risk-on” mode (www.dailyfx.com)
- ^ use economic news in your trading strategy
