Forex Today: USD weakness persists in Asia, US data in focus

Trump trade unwinding extended into Asia, with the US dollar and treasury yields accelerating overnight downslide, after Trump jawboned the US currency late-Wednesday. Amidst broad USD softness, risk-off sentiment too drove markets in Asia, as safe-haven gold and yen clinched multi-month highs at the expense of risk assets such as equities and bond yields.

Risk-aversion was mainly induced by renewed concerns on the Korean peninsula, after foreign media in N.Korea were told that North Korea’s nuclear test site appears “primed and ready,” while the US Govt sources noted that that N. Korea’s oil imports, cargo ships, state airline are among the possible targets in the event of US-led sanctions efforts on North Korea.

Calendar-wise, the Aussie benefited the most amid solid Aus jobs report and upbeat Chinese trade figures, while the Kiwi also track the AUD higher, despite risk-off market profile.

Later today, focus remains on the US macro news, in absence of significant market moving events lined up for release in the EUR calendar. Meanwhile, the German final CPI and BOE credit conditions survey will keep EUR, GBP traders somewhat busy. In the NA session, we have the Canadian manufacturing sales and NHPI data. From the US docket, PPI, consumer sentiment and jobless claims will be eyed. Besides, BOC Governor Poloz’s speech will also hog the limelight later today.

Main topics in Asia

USD/JPY drops below 109.00 as the 10-year treasury yield hit 5-month low

Offered tone around the US dollar gathered pace, pushing the USD/JPY pair to a session low of 108.81 as Trump’s dovish comments on the interest rates pushed the 10-year treasury yield to a 5-month low of 2.24%. 

Trump trade fades: Gold trades at levels last seen on Nov 10

Gold is back at the levels last seen on November 10, suggesting the Trump Trade has run out of steam.

Australian March employment upbeat across all indicators

Australian employment report showed a dramatic improvement across all indicators in the month of March, with the employment change at 60.9k vs 20k exp and 2.8k prior.

China’s March trade data (Yuan terms): A big beat, but imports ease

China's trade balance for March, in Yuan terms, came in at +164.3 billion CNY vs 75.80 bn expected and -60.36 bn last. Exports came at 22.3% y/y vs 8% expected and 4.2% last, while imports were +26.3% y/y vs 15.0% expected and 44% last.