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With not a lot of fresh catalysts to price in, forex traders focused on the recent shakeup in Trump’s administration and its impact on global trade.

  • Australia’s MI inflation expectations up from 3.6% to 3.7% in February
  • NZD reels from disappointing GDP release
  • Kudlow: China “has earned a tough response from the U.S.”

Major Events/Reports:

Australia’s MI inflation expectations

Data collected by the Melbourne Institute showed respondents becoming more hawkish on inflation in March. Its index increased from 3.6% to 3.7% for the month, which lines up with the RBA’s optimism that Australia’s inflation will eventually pick up its pace.

The report also tackled quarterly wage growth, and it showed that pay growth from a year ago in March had risen by 2.0% against a 1.5% reading last December.

Despite that, the report noted that “respondents appear cautious about future wage growth.

Markets react to Kudlow’s appointment

Unless you’ve been too busy looking at cryptocurrency charts, you should know that former CNBC host and contributor Larry Kudlow is set to replace Gary Cohn as director of the National Economic Council.

What caught analysts’ attention was Kudlow giving an interview where he said that China “has earned a tough response” from the U.S. and other nations.

Kudlow also supports a strong dollar, but it seems like the bulls are ignoring that tidbit for now.

High-yielding currencies got spooked by the possibility of a trade war between the U.S. (and friends?) and China but the Asian bourses had a more mixed reaction:

  • Nikkei is up by 0.13% to 21,805.7 after being down most of the day;
  • Australia’s A SX 200 is down by 0.06% to 5,924.5;
  • Hang Seng is up by 0.12% to 31473.1, and
  • Shanghai index is down by 0.04% to 3,290.079.

Commodity prices also shrugged off the worries. Gold took advantage of overall dollar weakness, while crude oil continued to rise on the back of OPEC’s decision to continue keeping a lid on its exports.

  • Gold is up by 0.12% to $1,326.32;
  • Brent crude oil is up by 0.05% to $64.91, and
  • U.S. WTI is up by 0.23% to $61.04.

Major Market Mover(s):

Yen crosses took cues from USD/JPY’s drop and overall risk aversion on concerns of a brewing trade war with China.

USD/JPY is down by 29 pips (-0.28%) to 106.02;
EUR/JPY is down by 24 pips (-0.18%) to 131.25;
GBP/JPY is down by 19 pips (-0.13%) to 148.24, and
AUD/JPY is down by 21 pips (-0.25%) to 83.53.

Whether it’s profit-taking from recent selloff or the bulls taking the lack of Brexit-related news as good news, the pound gained support from Asian session traders today.

GBP/USD is up by 21 pips (+0.15%) to 1.3982;
EUR/GBP is down by 4 pips (-0.05%) to .8854;
GBP/CHF is up by 15 pips (+0.11%) to 1.3206, and
GBP/NZD is up by 35 pips (+0.18%) to 1.9075.

Watch Out For:

  • 7:45 am GMT: France’s final CPI to remain at -0.1%?
  • 8:15 am GMT: Switzerland’s PPI (0.2% expected, 0.3% previous)
  • 8:30 am GMT: SNB’s monetary policy decision and assessment