Forex Today: Aussie cheers solid Aus trade, UK PMI, EZ CPI and US-China trade talks – key

Holiday-thinned trading extended into a fourth day today in the Asian session, as the Japanese traders enjoyed Constitution Day holiday. Amid light trading, the US dollar extended its post-FOMC corrective slide, lifting the sentiment around most majors.

The Aussie outperformed across the fx board, with the bulls having found fresh impetus from solid Aus trade report while the Kiwi followed suit, despite falling Chinese equities and ballooning NZ trade deficit. The USD/JPY pair also reverted towards 109.50 levels as the Yen regained ground on increased cautiousness ahead of the US-China trade talks.

Main topics in Asia

US slams the door on Brazil tariff negotiations - Reuters

As reported by Reuters, Brazil announced that the US had unilaterally pulled the plug on tariff negotiations with Brazil, contradicting a US statement that the two countries had reached a deal. 

Trump "all but decided" to withdraw from Iran deal - Reuters

According to sources obtained by Reuters, US President Donald Trump has mostly made up his mind about pulling out of the Iran deal and has only yet to decide how to go about withdrawing from the multi-country deal.

Breakthrough on US-China trade talks seen slimming - Reuters

Trade experts are concerned that the window of opportunity for US-China trade relations to peacefully resolve the current standoff is closing, as noted by Reuters.

New Zealand goods trade deficit neared 10-year high in the March 2018 quarter

New Zealand's goods trade deficit neared a 10-year high of $1.8 billion in the March quarter, Stats NZ reported today.

New Zealand PM Arden: business can be confident in this government

New Zealand PM Jacinda Ardern was on the wires last minutes, via Reuters, delivering a pre-budget speech in Wellington.

Australia's trade surplus unexpectedly expanded in April

Australia's trade surplus unexpectedly expanded to AUD 1527 million in March from the February surplus of AUD 1350 million revised up from 825 million), according to Australian Bureau of Statistics (ABS).

China equities slide as trade tensions ramp up ahead of US-China meeting

Asia stocks are slipping lower as traders get uneasy about the upcoming US-China trade negotiations, with the Hong Kong Hang Seng index leading the pack lower, down almost 1.5% on the day, bottoming out at 30,050.00.

Trump: will always have a good (great) relationship with China’s President Xi

The US President Trump is back on the wires now, via Twitter, tweeting that the US delegation will be "trying to negotiate a level playing field".

Key Focus ahead

Traders gear up for another eventful EUR calendar, with the UK services PMI report due on the cards at 0830 GMT, followed by the Eurozone flash CPI estimate that will be released at 0900 GMT. In the NA session, the Canadian trade balance will be reported alongside the US data dump. The US economic releases include the jobless claims, trade balance, factory orders and ISM non-manufacturing PMI release. Besides, the Speech by the Swiss National Bank (SNB) Chairman Jordan will be also closely eyed.

EUR/USD trying to gather itself for a run at 1.20 with EU CPI figures in the barrel

Thursday is a hectic showing for the EUR/USD pair, kicking off a with a preliminary reading of the European CPI figures for April at 09:00 GMT, and the year-on-year figure is expected to remain steady at 1.3%, while the Core CPI y/y is forecast to tick upwards to 1.2% after printing a flat 1% in the previous month.

Will UK services PMI put a bid under the GBP/USD pair?

Having dropped more than 800 pips in the last two weeks, the GBP/USD looks oversold as per the 14-day RSI and could witness a corrective rally. An above-forecast UK services PMI reading could set the corrective rally in motion. 

US Embassy in China: US delegation to meet Chinese officials for 2-day meeting

Reuters reports headlines from the US embassy in Beijing, citing that the US delegation is expected to meet the Chinese officials later today and tomorrow.

Key sticking points in the US-China trade dispute - Reuters

Reuters is out with the key points likely to be discussed today when the US Treasury Secretary Mnuchin’s delegation will meet the Chinese officials in Beijing.

US NFP: another robust gain anticipated circa 180k in April - Westpac

With the FOMC decision out the way, all eyes now remain on Friday’s US payrolls data, with the key highlights presented by the analysts at Westpac are found below …