Forex Today

The US dollar set off to a positive start to this week, after the bulls regained poise against most of the majors in the Asian session. The renewed broad-based US dollar strength was mainly driven by the ongoing rally in the US Treasury yields, especially the 10-year rates.

The Yen emerged the biggest loser versus the greenback while Cable was the strongest, despite mixed performance seen on the Asian equities and subdued oil prices. Both the Antipodeans traded modestly flat in tight ranges, as they look forward to fresh fundamental catalysts for fresh trading impetus.  

Main topics in Asia

US 10-year treasury yield hits 4-year high, eyes break above 3 percent

The yield on the benchmark US 10-year treasury yield is trading at 2.98 percent in Asia - up two basis points and highest since March 2014.

Nikkei 225 fails to jumpstart the week, falling back towards 22,000.00

The Nikkei 225 index is slipping back below the 22,100.00 level as apprehensive traders failed to keep early Monday's momentum going.

BoJ shows signs of backpedaling on ETF purchases - Nikkei

The Nikkei Asian Review published a story over the weekend on the Bank of Japan’s (BoJ) ETF purchases, citing that the central bank's fund buys in April is set to undershoot pace for full-year target.

Japan manufacturing PMI: Export orders drop

The Nikkei Flash Japan Manufacturing Purchasing Managers’ Index (PMI) increased to 53.3 in April vs. 53.1 in March, signaling a faster pace of expansion, however, the new export orders dropped.

UK PM May might have to accept permanent membership of customs union - UK Times

According to a weekend story carried by the UK Times, the UK Prime Minister (PM) Theresa May might have to accept a permanent membership of a European customs union.

BOJ's Kuroda: Monetary police should remain accommodative until Japan hits 2 percent inflation

Monetary policy should remain accommodative until Japan hits 2 percent inflation, the Bank of Japan (BOJ) governor Haruhiko Kuroda told CNBC this weekend.

Mexican central bank Governor sees no need of extra Peso intervention

Bloomberg reports comments from Banco de México (Banxico), the Mexican central bank, Governor Alejandro Diaz de Leon is on the wires now, delivered on Sunday in an interview in Washington.

G7 ministers to take a hard stance on Russia - Reuters

According to unnamed sources, Reuters is reporting that foreign ministers in the G7 plan to take a hard stance against Russia and its recent involvement in Syria and Ukraine, but intend to keep the door open for cooperation.

Key Focus ahead

After a data-light Asian session, the EUR calendar heading into the ECB week offers event risks in the Euro area flash manufacturing and services PMI reports, followed by the German Bundesbank (Buba) monthly economic report. Meanwhile, the UK docket remains absolutely data-dry.

The NA session sees the releases of the Canadian wholesale sales data and Markit flash manufacturing and services PMI readings from the US economy, which will be followed by the US existing home sales data. Also, in focus remains the Parliamentary testimony from the Bank of Canada (BOC) Governor Poloz and Deputy Governor Wilkins at 1930 GMT for near-term trading opportunities in the Canadian dollar.  

Is EUR/USD eyeing a downside break of 1.2150-1.2550 range?

The EUR/USD risks a downside break of the 1.2150-1.2550 trading range, courtesy of the widening US-German yield spread.  If the preliminary PMIs (due today) print below estimates, then the investors will likely start pricing-in renewed dovishness from the ECB. 

GBP/USD backed into a corner thanks to BoE Carney's smokescreen, 1.40 back on the cards

Monday is a quiet read for the Pound, with nothing of note on the calendar, and Sterling traders will be increasingly focused on GDP numbers at the end of the week.

Key events ahead? - Westpac

Analysts at Westpac noted the key events ahead to start the week.

Australia’s Q1 CPI seen rising 0.5 percent - Capital Economics

Analysts at Capital Economics offer a brief preview on what to expect from Tuesday’s Australia’s CPI release for the first quarter due at 0130 GMT.

Oil prices and US Yields to dictate the pace this week

While geopolitical tensions remain bubbling under the surface, rising oil prices and higher US yields suggest investors are likely to deal with increased volatility as a broad range of political, economic and financial events unfolds.

Source: fxstreet.com