Asia Summary and Highlights 3 Jul

Asia Session

It is a rangebound session for major FX pairs as market participants quietly wait for US NFP data. However, the antipodeans seems to be dragged by soft regional sentiment and slightly stronger USD. The Australian trade balance missed but is mostly affected by recovery in import and thus shouldn’t affect the coming RBA decision to cut. AUD/USD is trading 0.28% lower at 0.6565, NZD/USD is 0.34% lower at 0.6068 while USD/CAD rise 0.04%.

The optimism of trade deals continue to support global market on Thursday’s Asia.  Vietnam has been reported to have a deal with India closing by, yet there seems to be little progress with Japan. Auto tariffs remains a huge obstacle for an agreement to be reached.  USD/JPY is trading 0.17% higher at 143.88. Else, EUR/USD is down 0.08% and GBP/USD is down 0.04%.

North American session

The ADP employment report was weak with a decline of 33k, though the consequent dip in the USD was erased fairly quickly. GBP/USD, under pressure from rising gilt yields as Chancellor Reeves’ future was called into question, saw no bounce, and subsequently fell below 1.36.  

Later in the day Trump announced a trade deal with Vietnam under which Vietnam would pay 20% tariffs with the US having tariff-free access to the Vietnamese market, but the USD was unimpressed, slipping into the afternoon. USD/JPY fell to 143.60, still above the post-ADP low, after having moved back above 144, while EUR/USD rose to 1.18 from 1.1750. GBP/USD recovered above 1.36 but remained down on the day with EUR/GBP up to .8650 from .8580. USD/CAD fell below 1.36 from 1.3650 while AUD/USD rose to .6585 from .6550.