Forex Today

Forex today witnessed tight trading ranges amid mixed market sentiment, as chances of a global trade war are on the rise, with Mexico, Canada and Europe retaliating to the US metals’ tariffs imposed last week.

Amongst the Asia-pac currencies, USD/JPY tested the 110 handle and then backed-off, as the Yen bulls managed to fight back control, despite downbeat Japanese Markit services PMI and household spending data. Meanwhile, the Aussie returned to the red zone, after yesterday’s massive corrective rally, as the Australian current account data disappointed while the Chinese services PMI left the bulls unimpressed. The Reserve Bank of Australia’s (RBA) unchanged monetary policy stance also kept the bearish tone intact around the local currency.

The Kiwi traded listless below 0.7050, as markets digest New Zealand Treasury’s warning on the first quarter GDP growth, which negated the effect of higher oil prices. Gold prices on Comex traded modestly flat near $ 1296, unable to find a clear direction heading into the US ISM services PMI release due later on Tuesday.

Main topics in Asia

White House to keep sanctions on North Korea - Reuters

The White House has reported that sanctions currently on North Korea from the US will remain in place, despite a confusing Tweet from President Trump over the weekend …

IMF: Canada faces risks from US Trade policy - Reuters

As reported by Reuters, Canada faces extreme risks from US tax and trade policies according to the International Monetary Fund (IMF).

China's Caixin services PMI remains unchanged at 52.9 in May, matches estimates

China's Caixin services PMI for May came in at 52.9 vs 52.9 exp and 52.9 last, which showed that the business activity growth remained modest last month.

Sources: Mexico to impose 20 percent tariff on US pork imports effective June 6th - Reuters

Reuters quoted two industry officials with direct knowledge of the plan late-Monday, citing that Mexican government is looking to impose 20 percent tariff on the US pork legs and shoulders effective June 6, partly in response to the US metals' tariffs on Mexico.

New Zealand Treasury: First quarter GDP may miss forecast

New Zealand Treasury is out with a warning that first-quarter gross domestic product (GDP) may miss budget forecasts but also added that growth will likely pick up later this year. 

Reserve Bank of Australia keeps rates on hold for record 20th straight meeting

The Reserve Bank of Australia (RBA) at its monetary policy meeting held today, left the official cash rate (OCR) unchanged at a record low of 1.50 percent for the twentieth consecutive meeting.

RBA: Household consumption remains a source of uncertainty

Following are the key headlines from the June RBA monetary policy statement (via Reuters)

Asia stocks retreat as focus shifts back to fundamentals

Asia equity indexes are mixed for Tuesday, but the overall tone has taken a step back, with Japan's Nikkei stepping back into 22,500.00 once again after peaking at 22,593.00 earlier.

Key Focus ahead

A raft of final services PMI releases will dominate the EUR calendar today, with the main focus on the UK services PMI readings, especially after solid UK manufacturing and construction PMI reports. Also, of note remains the Eurozone retail sales that will be reported at 0900 GMT. Besides, markets will look forward to European Central Bank (ECB) Governing Council member Nowotny’s speech scheduled at 0930 GMT, followed by Bank of England (BOE) MPC member Cunliffe’s speech due at 1000 GMT.

Meanwhile, the focus will also remain on the Italian politics, as the new Prime minister (PM) Giuseppe Conte's new government is set for a confidence vote in parliament today.

In the NA session, all eyes remain on the US ISM non-manufacturing PMI release alongside the releases of the Markit services PMI and JOLTS job openings data. Meanwhile, New Zealand’s fortnightly dairy auction results by Fonterra will hog the limelight ahead of the ECB member Weidmann’s speech in Brussels at 1730 GMT.

EUR/USD: Break above 1.17 remains elusive, death cross on cards

The corrective rally in the EUR/USD seems to have run out of steam around 1.17 in, but moving average studies indicate the upside could soon gather traction.

GBP/USD pinned to 1.33 on fresh Brexit concerns, technical correction already running out of steam

Tuesday brings the UK's Markit Services PMI for May, expected at 53.0 compared to the previous reading of 52.8. The BRC Like-For-Like Retails Sales indicator dropped some positive figures in the late Monday session …

Source:fxstreet.com