Forex news for Asian trading for August 2, 2019

The NY market was surprised when at 1:30 PM ET on Thursday, Pres. Trump tweeted that he would impose a 10% tariff on the remaining $300B of goods imported into the US from China. US stocks snatch defeat from jaw of victory with as big gains were turned into big losses.

So when the Asian stock market opened, it was not a surprise to the major indices trading lower.

In fact, as I type:

  • Nikkei 225, -3.46%
  • Japan's Topix, -2.34%
  • China's Shanghai, -1.68%
  • CSI 300, -1.75%
  • Hong Kong's Hang Seng, -2.37%
  • Seoul's Kospi, -1.00%
  • Australia's S&P/ASX index -0.35%

Those are some pretty hefty one day losses. PS. the US e-mini is trading down -0.22%. The S&P index fell -0.90% yesterday after being up 1.11% at the highs (Ouch).

The risk off has kept the JPY as the strongest on the Pavlovian, "flight into the relative safety of the JPY" trade. The JPY was the run away strongest currency in the NY session, and it kept that distinction despite having their stocks creamed, and with increasingly fragile relationship with South Korea (Japan cabinet approves plan to remove South Korea from trade White List).

Forex news for Asian trading for August 2, 2019

The GBP is the weakest with the GBPUSD trading back below the 1.21000 level as I type (and looking vulnerable). The GBPJPY was the biggest decliner on risk off flows (trading down -0.52%).

The NZD was also lower on the day after ANZ consumer confidence for July came in weaker than expectations at 116.4 versus 122.6 last month (-5.1% MoM). The NZDUSD is pips away from the low from yesterday at 0.6533 (which was the lowest level since June 20.

The Australia's S&P/ASX is ONLY down around -0.35% helped by slightly better than expected retail sales for June (0.4 % versus 0.3% estimate). That has the AUD higher on the day so far. If the AUDUSD is able to keep gains for the day, it would snap a 10 day losing streak for the pair.

The EURUSD did move higher earlier in the session and tested the 50% midpoint of the week's trading range at 1.1095 (see: EURUSD keeps a lid on at the 50% midpoint). However, when a headline came out saying "Trump to make announcement on EU trade at 1:45 PM ET on Friday", it can only be bad news on trader for the EU....right? The EURUSD fell from around 1.1190 down to a session low of 1.10692, and just above the rising 200 bar MA on the 5 minute chart. As I type, the 200 bar MA at 1.10724 is moving toward the falling 1.10814 with the price between the two levels.

The USD was mixed with gains vs the GBP, NZD, EUR, and CAD, offset by declines vs the JPY, AUD and CHF. In less than 8 hours (at 8:30 AM ET/1230 GMT), the key US employment report will be released with expectations for NFP to rise by 165K vs 224K last month. A number of that magnitude should give the greenback a boost, but with all the trade risk, it is still all up in the air (what to expect from the report, CLICK HERE).

Wishing you all a happy, and safe weekend and continued good fortune with your trading.