Forex Today: Kiwi volatile on neutral RBNZ, plenty of risk events ahead

Forex today in Asia was driven broad USD strength and risk-on flows, backed by renewed optimism over Trump’s proposed tax relief. Among the Asia-pac currencies, the Kiwi witnessed good two-way business, as markets assessed the neutral stance adopted by the RBNZ at its policy meeting today. The Aussie remains depressed throughout the Asian session, mainly weighed down by AUD/NZD’s weakness, while USD/JPY surpassed 113 mark on rising Fed rate hike expectations and Trump reflation trades.

Main topics in Asia

RBNZ: OCR unchanged, "on hold" guidance for monetary policy maintained – Westpac

Dominick Stephens, Research Analyst at Westpac, explains that as expected, the RBNZ left the OCR unchanged at 1.75% at this morning’s OCR Review and the bottom line guidance was a repeat of the guidance that has been used more-or-less unchanged all year:

Japan considering lowering leverage limit for fx trades – Nikkei

The Nikkei, a Japanese daily, reported that Japan’s Financial Services Agency (FSA) is considering lowering the limit for FX leverage from 25 to 10.

Fed’s Rosengren: Scope for Fed to move rates slowly due to low inflation

More comments hit the wires from the Boston Fed President Rosengren earlier today, as he responded to the Q & A session, following his scheduled speech in New York.

South Korea expects more North Korea provocations mid-October - RTRS

In a meeting with South Korea’s President Moon Jae-in on Thursday, national security adviser Chung Eui-yong said he expected Pyongyang to act around Oct. 10 and 18, but gave no details, Reuters reported.

Gold: headed for a break below $1,280 near-term psychological support?

Gold bugs are surely bugged out as there are very little signs of support en-route for a break of 1278.80 spot - a former key area of resistance. 

Key Focus ahead

We have a busy European session ahead with a slew of speeches lined up from the global central bankers, starting-off with the BOJ Governor Kuroda, followed by ECB’s Praet, BOE Governor Carney and RBA Assistant Governor Debelle. Also, speeches by Japan’s PM Abe and her British counterpart Theresa May remain in the spotlight. On the data front, Europe sees the release of the Eurozone consumer confidence, German and Spanish inflation figures.

Moving on, the US docket also remains quite eventful, as the final GDP data will be released alongside the weekly jobless claims and goods trade balance. Meanwhile, FOMC members George and Fischer’s speeches will be also closely heard.

EUR/USD headed to 1.1700 ahead of German CPI?

EUR/USD extended its overnight retreat from near 1.1770 levels into Asia, as the bears look to test 1.1700 levels ahead of the German CPI and US GDP figures.

GBP/USD - Falling channel established ahead of Carney & PM May speech

BoE governor Mark Carney will take center stage as the central bank celebrates 20-year anniversary of its independence. Prior to 1997, interest rate decisions were taken by the Chancellor, rather than by independent economists.

Japan’s PM Abe to speak to reporters at 0800 GMT - Kyodo

Japanese news agency, Kyodo, reports that PM Abe is expected to speak to reporters at 5 PM (Japan local time), i.e, 0800 GMT.

UK PM May to speak at the BOE conference on Thursday

Reuters reports that the UK PM Theresa May is expected to speak on free markets and fiscal prudence at the Bank of England conference scheduled later on Thursday.

Daily Forex Outlook: What you need to know for Thursday

US rates continue to support a higher USD against the EUR, as the yield spread between Germany's and US 10-yr keeps shrinking.