Forex Today: USD rebound capped in Asia, a light EUR calendar ahead

Asia witnessed a quiet start to a busy week ahead, as no relevant economic news was reported from the Asia-pac economies. Hence, the fx markets tracked the USD price-action, with some solid bounce seen in the US dollar across its main competitors, as Treasury yields extended their rally. However, the renewed uptick in the buck lost legs, offering some relief to most majors. USD/JPY rallied sharply to test 109 handle before reversing to the familiar region around 108.75. Both the Aussie and Kiwi stalled their corrective slide and consolidated the losses near 0.8100 and 0.7340 respectively. The Swiss franc emerged the top gainer while the AUD was the main laggard.

Meanwhile, the Asian equities traded firmer, despite mixed oil prices, as rising Treasury yields supported the market sentiment. Copper prices on Comex rose nearly 1% to trade near 3.23 levels while gold prices traded on the back foot just shy of $ 1350.

Main topics in Asia

ECB's Knot: should be clear on ending asset purchases after September - Reuters

The European Central Bank (ECB) should make it clear how it will end its asset purchases as soon as possible after its expiry in September, said Dutch central bank president Klaas Knot told on a Dutch current affairs program Buitenhof on Sunday. 

BoJ’s Kawai: Not considering issuing a digital currency because there is no demand

Bloomberg reports comments from Yuko Kawai, the head of the Bank of Japan (BoJ) FinTech division, delivered in an interview published Sunday.

US 10-year Treasury yield hit 42-month high

The yield on the US 10-year Treasury note rose to 2.692 percent in Asia; its highest level since July 2014. 

Brexit biggest threat to the UK financial center - Business survey

The quarterly survey from business lobby CBI and consultants PwC revealed that uncertainty over Britain’s future trading relations with the European Union (EU) after Brexit is the most serious threat to London as the world’s top financial center.

Key Focus ahead

Monday’s EUR calendar remains absolutely data-dry, except for the German import prices data release, which is expected to virtually have no impact on the Euro. Meanwhile, the UK docket remains empty, as investors gear up for a string of PMI reports to be released from the UK. In the NA session, all eyes will remain on the US core PCE price index and personal spending data for fresh impetus.

Looking ahead, the FOMC decision, US NFP, Eurozone CPI and Australian CPI are likely to emerge the main market-moving events this week.

EUR/USD - Call demand drops, rally done for now?

EUR/USD traded on the back foot in Asia as the rising treasury yield helped the oversold American dollar regain come poise. The currency pair hit a low of 1.2385, adding credence to the last week's bearish reversal (pin bar candle of Jan. 25).

GBP/USD stages solid comeback, re-takes 1.4150

Fresh bids emerged just ahead of the 1.41 handle, prompting a solid recovery in the GBP/USD pair, as the bulls look to regain the mid-1.41 barrier amid stalled rebound seen in the US dollar against its major peers.

Japan MoF, BoJ and FSA officials to meet at 0730 GMT to discuss markets

Reuters quotes a Japanese government source, as citing that the Bank of Japan (BoJ), Ministry of Finance (MoF) and Financial Services Agency (FSA) officials are likely to meet Monday afternoon to discuss markets.

Fed Preview: A slightly hawkish rewording of the inflation assessment likely - Goldman Sachs

A Bloomberg report quotes Goldman Sachs economist Jan Hatzius as saying that the Fed is likely to issue an upbeat post-meeting statement that includes an upgrade to the balance of risks and a slightly hawkish rewording of the inflation assessment.

The week ahead - Rabobank

Analysts at Rabobank explained the week ahead looks like.