Forex Today: Asia risk-off at full steam on N. Korea news, German Gfk – Up next
Forex today ignored macro news out of Japan, as risk-off sentiment dominated markets, in response to the latest reports of North Korea having fired several missiles, of which one broke into three pieces and fell into waters off Japan’s Hokkaido. Safe-havens such as the Yen, CHF and gold rallied hard, while investors sold-off higher-yielding bets such as the equities, oil and Antipodeans.
The risk currency – GBP stood resilient to risk-off flows, maintaining a minor bid throughout the Asian trades. Meanwhile, USD/JPY was knocked-off to fresh 4-month lows and EUR/USD consolidated near 2-1/2 year tops of 1.1986 levels.
Main topics in Asia
North Korea Headlines
North Korea's missile fell into waters off Japan's Hokkaido - NHK
South Korea Military is raising alert after North Korea's missile launch - Yonhap
UN security council said to convene emergency meeting
US military considering deploying strategic military assets to Korean peninsula - RTRS
Market responses to N. Korea news
USD/JPY: in minor recovery attempt of initial risk off offers on N.Korean news
Gold clocks fresh 11-month highs near $ 1328 on N. Korea-led risk-off
AUD/JPY: risk off on North Korea sends the cross over a point lower
NZD/USD: N. Korea-driven risk-off caps the recovery above 0.7250
Key Focus ahead
Heading into Europe, traders brace for the second-tier macro news in the German Gfk consumer climate, while the EUR calendar remains data-quiet, with the exception of the UK nationwide HPI. In the NA session, markets look forward to the Canadian RMPI figures, followed by the US S&P/CS Composite-20 HPI y/y and key CB consumer confidence data for near-term trading opportunities.
EUR/USD: Bulls still targeting 1.2000 amid weaker Treasury yields?
Having found fresh bids near 1.1950 levels, the EUR/USD pair extended its bullish consolidation phase into late-Asia, as the bulls await the sentiment on the European open for the next move higher to reclaim 1.20 handle.
GBP/USD looks to regain 1.2950, despite risk-off on NK missile fire
The GBP/USD pair managed to remain better bid in the Asian session this Tuesday, although the bears continued to guard the 1.2950 barrier on the back of North Korea’s missile test news fuelled widespread risk-aversion.
Daily Forex Outlook: What You Need to Know for Tuesday
On the back of some rather tame flows on Monday, with summer holidays in London + overstretched Jackson Hole-induced moves to blame, market participants woke up in the far east with the prospects of yet another escalation in the North Korean crisis.
The data docket for the week ahead is a busy one - UOB
Analysts at UOB Group explained that, in this upcoming week, we will again not have any central bank monetary policy decision from G7 but the data calendar for US and developed economies is substantial with the US calendar climaxing on Friday (1 Sep) with the release of August US labor market report.