Forex Today: USD sell-off extends, UK manufacturing and Canadian jobs data in focus

Broad based US Dollar sell-off remained a key theme during Asian session Friday. Despite a bill to extend the US debt limit for around three-months to mid-December, fading prospects of any additional Fed rate hike action, reinforced by a continuous slide in the US Treasury bond yields dragged the key US Dollar Index to a 33-month low, in the 91.00 neighborhood. 

The N. Korean threat remained very much in the spotlight and continued benefitting the Japanese Yen's safe-haven appeal. The USD/JPY pair tumbled to its lowest level since Nov. 2016 but was seen fighting hard to hold its neck above the 108.00 handle. 

Today's mixed results from Chinese trade balance data that showed a strong y-o-y growth in imports benefitted antipodean, with the AUD/USD pair tapping the 0.8100 handle for the first time since May 2015 and the NZD/USD major reclaiming the 0.7300 round figure mark. Later today, a scheduled speech by RBA Governor Philip Lowe would influence the AUD/USD pair movement on the last trading day of the week. 

Against the backdrop Wednesday's surprise BOC rate-hike and persistent USD selling bias, the prevalent positive trading sentiment around crude oil prices provided an additional boost to the commodity-linked currency - Lonnie. The USD/CAD pair broke below the 1.2100 handle and touched its lowest level since May 2015. The pair would be in focus again later during the NA session and would be guided by the latest Canadian employment details for the month of August. 

Meanwhile, the EUR/USD pair extended its post-ECB climb and jumped to the highest level since January 2015, while the GBP/USD pair held comfortably above the 1.3100 handle. The British Pound would now take some fresh impetus from today's release of UK manufacturing/industrial industrial production and goods trade balance data, due later during the European session.

Main topics in Asia

NY Fed's Dudley less hawkish than usual

NY Fed's Dudley said that the US economy is to grow at slightly above-trend pace, although he was certainly less dovish than previous.

China August trade surplus narrowed to USD 41.99 billion

China August trade surplus narrowed to USD 41.99 billion, missing the estimate of USD 48.60 billion. The surplus in July was USD 46.73 billion.

AUD/USD spikes to 0.8100 handle, highest since May 2015

The greenback extended overnight slump, pushing the AUD/USD pair to its highest level since May 2015 and closer to the 0.8100 handle.

NZD/USD hits 2-1/2 week tops, beyond 0.73 handle

The NZD/USD pair continued gaining strong traction through Asian session on Friday and has now jumped to 2-1/2 week tops, above the 0.7300 handle.

Key Focus ahead

US 10-year Treasury yield hits lowest since US elections

The yield on the benchmark 10-year Treasury fell to 2.027% yesterday; the lowest level since US elections. At press time, the yield traded at 2.046%. 

GBP/USD - At 5-week highs, Official numbers need to confirm the J-Curve effect

The Asian desks took cues from the action in the North American session and offered US dollar across the board. Thus, GBP/USD jumped to a fresh 5-week high of 1.3139 levels. As discussed yesterday, the rally is backed by the narrowing US-UK 10-year yield differential.

USD/JPY inching back closer to yearly lows

The USD/JPY pair remains within striking distance of yearly lows, touched in the previous session.