Forex Today: Kiwi lifted by RBNZ inflation expectation, Fedspeak eyed

Broad-based US dollar weakness remained the main underlying theme in Asia this Wednesday, aiding the recovery in most majors. However, the USD/JPY pair experienced listless trading, as negative Japanese equities and BoJ’s Summary of Opinions put a bid under the Yen. Meanwhile, the Antipodeans benefited from the ongoing rebound in the Chinese Yuan while a jump in the Chinese imports also boosted China’s proxies. The Kiwi also received fresh support from a slight rise in the RBNZ inflation expectations for Q3.

On the commodities’ front, both crude benchmarks traded flat, despite hopes of tightening global supplies and bullish API crude stockpiles report. Gold futures on Comex held onto gains above the $ 1220 levels while Comex copper futures extended previous gains to trade around $ 2.77.

Main topics in Asia

US finalizes more China tariffs, due August 23rd - Reuters

New Zealand Fin Min Robertson: there is every reason to be optimistic

Trump: US GDP could be in the fives next quarter

Goldman Sachs: Metals forming a base

USD/CNH hits 5-day low

RBNZ's New Zealand 2 year inflation expectations for Q3 a tad higher at 2.04% y/y

RBA’s Lowe: Board sees no strong case for near-term rate move

China’s July trade balance (CNY): Surplus unexpectedly shrinks to 176.96bn as imports jump 20.9%

China’s July trade data (USD): Surplus narrows to 28.05bn, misses estimates

RBA’s Lowe: Escalation of trade war could be damaging for the global economy

Key Focus ahead

There is nothing of note, in terms of economic releases, in the European session ahead. Hence, attention turns towards the NA session, which also remains data-light, with the only Canadian building permits data due on the cards at 1230 GMT. Also, for the CAD traders the EIA crude inventories data due at 1430 GMT will be closely eyed for any impact on oil prices.

EUR/USD is looking to re-enter pennant, fear gauge drops

The EUR/USD rose above 1.16 in Asia and is now challenging the resistance(former support) of the lower end of the pennant, currently located at 1.1622. A daily close well above that level would abort the bearish view put for by the pennant breakdown witnessed last Thursday.

GBP/USD bounces to 1.2950, but upside limited as traders await Friday's UK GDP

The economic calendar for this week remains thin, with only low-tier data on the offering for Wednesday, and GBP traders will be turning their eyes to the UK's GDP reading due on Friday.

RBNZ: All eyes on Orr’s press conference - TDS

Analysts at TD Securities (TDS) offer their insights on the upcoming Reserve Bank of New Zealand rate decision due this Thursday.