Forex Today: USD better bid ahead of G20, key Central banks’ events

Forex today in Asia kicked-off on a cautious footing, as investors remained in a wait-and-see mode heading into a busy week, dominated by key central banks’ monetary policy decisions while global trade fears continued to loom on the EU’s retaliation. Amid uncertainty and market unrest, traders preferred to hold the US currency, also as the two-year Treasury yields sit at decade highs.

Among the Asia-pac currencies, the safe-haven Yen was boosted at the expense of the higher-yielding currencies such as the Aussie and Kiwi, as risk-off emerged the key underlying theme. This was well reflected by a sharp sell-off in the Japanese benchmark index, the Nikkei 225 while oil and copper prices also fell on the back of reduced appetite for the risk assets.

Main topics in Asia

Putin secures another six years as Russian President - Reuters

Vladimir Putin has won the Russian election in a landslide election, as reported by Reuters.

Trade war noise: EU retaliates, targeting US exports

Weekend news has the European Union setting out how it will target US exports when tariffs come into effect. 

US two-year yield hits fresh 10-year high

The yield on the short-duration treasuries is on the rise in Asia as investors price in the increased probability of faster interest rate hikes. 

BOJ summary of opinions: Prolonged Yen appreciation will threaten inflation goal

Bank of Japan (BOJ) is worried that a further appreciation in Yen and the decline in stock prices would produce negative wealth effect for households and industries …

US tariffs "would trigger chain reaction of negative consequences" - WSJ

As reported by the Wall Street Journal, trade associations are imploring the US to reconsider Trump's planned tariffs on trade goods coming from China, citing the potential backlash that could wind up doing harm to American industries.

Japan PM Abe: Public Trust Has Been Shaken

Comments from Japanese Prime Minister Abe are flowing in via Livesquawk-

UK households report fastest income growth since 2016 - IHS Markit survey

A survey of the UK households, conducted by the IHS Markit, showed on Monday that the Kingdom’s households report fastest income growth since the global financial crisis in 2009.

BOJ's government debt holdings hit record in Q4 - Reuters News

The Bank of Japan's (BOJ) holdings of government debt rose to a record ¥ 449 trillion ($4.24 trillion) in government debt at the end of December - 6.8 percent from the same period a year earlier. 

Key Focus ahead

We have a quiet start to an eventful week ahead in terms of the macro calendar, with plenty of risk events in store. Today, there are no first-tier economic releases due on the cards across the globe. Hence, attention will remain on the German Bundesbank (Buba) monthly report and FOMC member Bostic’s speech while the G20 Finance Leaders’ meeting will go on all through the day. Trade tariffs issue is likely to be the key focus of the G20 leaders at this week’s meeting.

EUR/USD: Focus on diverging central bank expectations ahead of Fed

The common currency traded on the back foot against the greenback in Asia and will likely extend losses in Europe and US session, courtesy of diverging monetary policy expectations. 

GBP/USD trying to keep it together ahead of UK inflation

Little else of note is on the macro calendar ahead of Tuesday's CPI data dump, though some traders will be keeping a close eye on FOMC member Raphael Bostic's speech at 13:00 GMT later today. 

Week ahead and key events - Rabobank

Analysts at Rabobank noted today is a snooze-fest in terms of data, but highlight the week's key events as follows. 

Week Ahead: Fed, BoE, G20 in Focus

As markets struggle to find direction amid the push and pull of inflation, interest rates, economic growth, and the continuing specter of global trade wars, the busy week ahead will have many more potential volatility triggers that are poised to move currency prices.