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The yen and the franc were on top of the forex heap during the Asian session, as traders continued to price in escalating trade tensions between the U.S. and China.

Meanwhile, commodity-related currencies took the most hits, as weak data and jitters accompanied profit-taking in the markets.

  • RBA’s omits key “up rather than down” rate phrasing in latest minutes
  • Australia’s house price index (q/q) down by 0.7% vs. 0.9% dip expected, 1.0% gain in Q4 2017
  • Kim Jong Un makes third visit to China in months
  • Markets tumble as Trump proposes additional tariffs on China’s products

Major Events/Reports:

RBA’s meeting minutes

Earlier this month the Reserve Bank of Australia (RBA) kept its rates steady at 1.50% as many had expected.

In its statement the central bank noted that data are consistent with a growth rate of 3.0% and above, but also maintained its concerns over household consumption and “uncertainties” such as international trade, political developments, and economic developments (in some emerging economies).

Today’s meeting minutes release didn’t really offer anything new. Instead, market geeks focused on the fact that the RBA has omitted this phrase from last month’s release:

“…members agreed that it was more likely that the next move in the cash rate would be up, rather than down.”

Others aren’t too worried, however, since Governor Philip Lowe repeated the hawkish sentiment as late as last week even though he also cautioned that “there is not a strong case for a near-term adjustment in monetary policy.

Trump steps up tariff plans

Asian session players weren’t any happier over Trump’s additional tariffs as their U.S. counterparts were.

See, Trump has apparently requested the U.S. Trade Representative to identify an additional $200B worth of Chinese goods to slap 10% tariffs on. This comes after announcing $50B worth of additional tariffs last Friday that’s scheduled to kick in on July 6.

Trump warned that the additional duties will be implemented “if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced.

China’s Commerce Ministry hit back against the move, calling it a “blackmail” that “deviates from the consensus reached by both parties on many occasions.” It went on to add that it will fight with “qualitative” and “quantitative” measures if the U.S. publishes the list of Chinese goods.

China’s equities markets took heavy hits at the escalating tensions, while other Asian bourses also saw significant damage.

  • Nikkei is down by 1.10% to 22,430.3
  • A SX 200 is down by 0.42% to 6,125.6
  • Hang Seng is down by 2.18% to 29,650.0
  • Shanghai index is down by 2.97% to 2,932.077

Crude oil slipped some more on overall risk aversion but safe haven gold found support amidst all the selling of high-yielding bets.

  • Gold is up by 0.44% to $1,283.72
  • Brent crude oil is down by 0.90% to $74.76
  • U.S. WTI is down by 0.59% to $65.42

Major Market Mover(s):


Traders flocked to low-yielding currencies like the yen and franc as they worry over escalating trade tensions between China and the U.S.

USD/JPY is down by 77 pips (-0.70%) to 109.77; EUR/JPY is down by 76 pips (-0.59%) to 127.73, GBP/JPY is down by 78 pips (-0.53%) to 145.63.

USD/CHF is down by 29 pips (-0.30%) to .9922; EUR/CHF is down by 21 pips (-0.18%) to 1.1545, GBP/CHF is down by 17 pips (-0.13%) to 1.3163


Commodity-related dollars saw the most losses as investors worry over the impact of a global trade war on commodity demand and transactions.

The Aussie was further weighed by a not-so-impressive quarterly house price report and a not-so-hawkish RBA meeting minutes. Meanwhile, a relatively strong rise in AUD/NZD limited the Kiwi’s losses.

AUD/USD is down by 19 pips (-0.25%) to .7404; AUD/JPY is down by 78 pips (-0.95%) to 81.28; EUR/AUD is up by 61 pips (+0.39%) to 1.5715, and AUD/CHF is down by 40 pips (-0.55%) to .7346.

USD/CAD is up by 15 pips (+0.11%) to 1.3215; CAD/JPY is down by 67 pips (-0.79%) to 83.06; CAD/CHF is down by 30 pips (-0.39%) to .7508, and EUR/CAD is up by 35 pips (+0.23%) to 1.5377.

NZD/CHF is down by 15 pips (-0.21%) to .6887; NZD/JPY is down by 48 pips (-0.62%) to 76.19; AUD/NZD is down by 32 pips (-0.29%) to 1.0668, and GBP/NZD is up by 27 pips (+0.14%) to 1.9113.

Watch Out For:

  • 5:45 am GMT: Swiss SECO economic forecasts
  • 8:00 am GMT: ECB Governor Draghi to give a speech in Portugal. Read what you can expect from the event here!
  • 8:00 am GMT: Euro Zone current account (30.3B EUR expected, 32.0B EUR previous)