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Talking Points:

  • Yen gains, commodity currencies drop on renewed trade war jitters
  • Euro[1] unlikely to find follow-through in revised Eurozone GDP data
  • Stock index futures down, hinting risk aversion is likely to continue

The Japanese Yen[2] outperformed in Asia Pacific hours as trade war jitters darkened the markets’ mood anew[3], sending regional stocks lower and offering a lift to the standby anti-risk currency. The similarly-minded Swiss Franc also rose. Sentiment-geared commodity bloc currencies bore the brunt of selling pressure.

The Australian Dollar[4] saw losses amplified by disappointing local GDP data[5]. The Canadian Dollar[6] competed vigorously for the dubious honor of the day’s weakest G10 FX unit. Sheer proximity to the US seems to have become a liability as the tone of the Trump administration turns increasingly protectionist.

Looking ahead, the European data docket offers little that might inspire fireworks. The final revision of fourth-quarter Eurozone GDP figures will cross the wires. Absent a major deviation from earlier estimates, the Euro seems likely to look past the outcome, focusing on the upcoming ECB policy decision[7] instead.

Absent a potent-enough driver from scheduled event risk, broadly based sentiment trends will probably remain at the forefront. Futures tracking the benchmark S&P 500[8] stock index are pointing sharply lower, hinting that a “risk-off” mood is likely to prevail as day wears on.

Investors’ heightened headline sensitivity ought to be kept in mind however. A mere comment from US House of Representatives Speaker Paul Ryan opposing Trump-back tariffs was apparently sufficient to throw markets back into “risk-on” mode[9] yesterday. Something similar may yet transpire in coming hours.

See our free guide to learn how to use economic news in your trading strategy[10]!

Asia Pacific Trading Session

Japanese Yen May Continue Higher as Trade War Fears Resurface

European Trading Session

Japanese Yen May Continue Higher as Trade War Fears Resurface

** All times listed in GMT. See the full economic calendar here[11].

FX TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak[12] on Twitter

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References

  1. ^ Euro (www.dailyfx.com)
  2. ^ Japanese Yen (www.dailyfx.com)
  3. ^ trade war jitters darkened the markets’ mood anew (www.dailyfx.com)
  4. ^ Australian Dollar (www.dailyfx.com)
  5. ^ disappointing local GDP data (www.dailyfx.com)
  6. ^ Canadian Dollar (www.dailyfx.com)
  7. ^ upcoming ECB policy decision (www.dailyfx.com)
  8. ^ S&P 500 (www.dailyfx.com)
  9. ^ throw markets back into “risk-on” mode (www.dailyfx.com)
  10. ^ use economic news in your trading strategy

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