Dollar is recovering against most of the currencies and Pound is rising ahead of today’s meeting of the Bank of England
The Asian stocks were buoyed by late-session rally as S&P futures erased their weakness. The MSCI Asia Pacific Index rose 0.5%, while the Nikkei was 1.2% higher.
Following the Reserve Bank of New Zealand comments, the dollar seemed to be on a stronger foot as it gained against all the emerging market currencies. Moreover, the dollar had another boost after China allowed the QDLP outbound investment scheme back in circulation. WTI crude was near the $61.50 level.
In the key headlines for the Asian session:
- Fed’s Williams still sees the Fed on a very gradual tightening path.
- K. January RICS house price balance came in at 8 vs 5 estimates.
- China January trade balance was at 135.8-Billion-yuan vs the 330.0 Billion yuan estimated. Exports came in at 6.0% vs the 2.6% estimated and imports increased 30.2% vs the 5.3% estimated.
- Suzuki says vital to continue BOJ easing, as they are half way to the CPI target.
The European market takes over the Asian Session as all eyes ignore the important speakers today from the German Central Bank President Weidmann and later on from the Reserve Bank of Australia Lowe. Investors will focus on the Super Thursday with the BOE Inflation Report along with the votes on the Official Bank rates. Several key Monetary Policy Statements will be released today focusing the U.K. Economy and where the BOE sees the economy heading especially with Brexit still in play.
The dollar got an unexpected lift in early Asian afternoon dealings after Reuters reported China has revived its Qualified Domestic Limited Partnership outbound investment scheme after a two-year halt, a move that would allow foreign fund managers to raise funds in China for investment overseas. USD/CNY surges on the news, lifting the dollar against the yen and Asian currencies. Even the S&P and Nikkei futures climb after spending most of the morning underwater. New Zealand dollar slumped after the RBNZ signaled it will stay on hold until mid-2019.Sterling edges higher ahead of the BOE decision later today.
USDJPY – The yen is consolidating above the support of January’s lows seen at the 108.28 while being capped at the highs of February 2nd at 110.48.
EURUSD – The pair consolidating just under the January highs of 1.2537 while being support by January 18 lows at 1.2165.
EURJPY – The Yuppy is holding above the 100-DMA support at 133.63 while facing resistance at the February 2ndhighs of 137.50.
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***Information contained in this newsletter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making but merely provides information from the market for its clients as additional information is made available as per the events occurring in the financial markets.
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