Forex Today: Commodity-currencies rally in Asia, UK CPI, ZEW eyed

A sense of calm prevailed across the fx board in Asia today, as nervousness sets in ahead of the commencement of the 2-day FOMC policy meeting. The US dollar witnessed some buying interest against most of its major peers, despite subdued treasury yields.

Meanwhile the commodity-currencies were the top gainers amid higher oil prices and respective fundamentals. The USD/CAD pair refreshed two-month lows, in the wake of BOC’s Wilkin’s hawkish remarks, while the Aussie cheered upbeat Aus business sector. The Kiwi extended the rally to hit the highest level since late-Feb.

Attention now turns towards the EUR calendar, with the German WPI numbers already out and disappointed markets. Next of note remains the UK CPI data, followed by Germany’s ZEW surveys. In the US session, we have the PPI release alongside NFIB Small Business Index.

Main topics in Asia

Qatar seeks UN intervention – Reuters

Reuters reports that Qatar is seeking UN intermediation to resolve gulf airspace row. It is better than the cutting of ties and fears of escalation to a full blown gulf crisis.

Australia's May NAB business survey points at upbeat business sector

Australia's NAB business confidence for the month of May came in at 7 vs 13 last, while business conditions stood at 12 vs 13 last, which according to NAB, pointed to an upbeat business sector.

BOJ rebuffed speculation that it was engaging in "stealth tapering" - RTRS

Reuters out with more details on the BOJ’s JGBs purchases, especially after BO’s board member Amamiya noted earlier that slowdown in BOJ JGB purchases is a result of guiding rates appropriately.

USD/CAD extends BOC-led sell-off, weakest since April-mid

The Canadian dollar extends the overnight rally against its American rival into Asia, now pushing USD/CAD to print fresh two-month lows of 1.3274.

Key Focus ahead

EUR/USD: Bears targeting 1.1165 ahead of ZEW?

After a brief period of overnight consolidation, the EUR/USD pair finally broke to the downside in the Asian trades, with the bulls having failed to resist above 1.12 handle once again.

GBP/USD Forecast: likely to accelerate the bearish slide below 1.2620, UK CPI eyed

The pair retains its negative bias through Asian session on Tuesday as traders now look forward to the today's release of UK inflation figures.

US Sec. of State Tillerson to testify on Russia, diplomacy budget cuts before the lawmakers

Reuters out with latest headlines, noting that the US Secretary of State Rex Tillerson will testify before the Congress about President Donald Trump's unpopular budget, conflicting messages about foreign affairs and links between the administration and Russia, including his own links, starting today.

The US dollar Week ahead is a big one - Westpac

Analysts at Westpac explained that this week’s event calendar will be important for markets: notably the FOMC decision and CPI data. 

AUD to consolidate near its 200-DMA ahead of a BIg week - CBA

Commonwealth bank of Australia (CBA) out with its latest note on the AUD, citing key catalysts that will drive the currency this week.