Forex Today: Yen stages solid comeback in Asia, Draghi’s speech in focus

Forex today experienced a volatile session on the first trading day of this week, despite a quite macro calendar, with the US dollar stumbling ahead of the Fed Chair Powell’s testimony due tomorrow while the demand for the Yen gathered steam, following BoJ Governor Kuroda’s comments, as markets ignored the risk-on rally in the Asian equities.

Amid a better risk environment and broad-based US dollar selling, the Antipodeans benefited the most, with the Kiwi having stormed its way through the 0.73 handle. EUR/USD remained better offered above 1.2300 while Cable flirted with the 1.4000 barrier.

Main topics in Asia

CBI: UK services businesses enjoy first profit rise in two years - RTRS

The CBI said volumes in the services sector as a whole grew at the fastest pace since August 2015 in the three months to February, and profits rose too.

Oil output cuts may be eased sometime in 2019 - Saudi's Al-Falih

Bloomberg report quotes Saudi Arabia’s oil minister Khalid Al-Falih as saying that the production curbs may be eased “sometime in 2019, but we don’t know when and we don’t know how.”

BOE's Carney: Depreciations don't work

The Bank of England (BOE) economists are divided on the impact of currency depreciation, according to FT report. Governor Carney believes depreciations don't work.

BoJ Kuroda speaking in parliament: delay in achieving the 2 Pct target is regrettable

The Bank of Japan's governor, Kuroda, is speaking in parliament, repeating the same statements that markets have heard time and time again and thus there has not been any reaction to the following statements so far.

BoJ’s Kuroda: Aiming at 2% inflation contributes to forex stability

More comments flowing in from the BoJ Governor Kuroda, as he speaks in Parliament in Tokyo.

Key Focus ahead

The data-dry economic calendar extends into Europe, with the only second-liner higher street lending data from the UK due on the cards. However, the main risk event for today remains the ECB President Draghi’s testimony on monetary policy and the inflation outlook before the European Parliament Economic and Monetary Affairs Committee, in Brussels at 1400 GMT.

Also, of relevance remains the US existing home sales data and BOE MPC member Cunliffe’s speech due later in the NA session, as investors gear up for the Fed Chairman Powell’s testimony due tomorrow. Powell is scheduled to testify on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington DC.

EUR/USD - Focus on Italy-German yield spread and Powell testimony

Last week's Fed and ECB minutes showed the monetary policy divergence is widening in the favor of the US dollar. Still, the downside in the EUR/USD was capped around 1.2260. 

GBPUSD looks to extend gains above 1.4000, Fed's Powell eyed

GBP/USD has lifted to kick off the week's trading, testing into the 1.4000 handle in the pre-London markets.

China PMI Surveys, Q4 capex are important for AUD, but Fed Chair Powell’s testimony on Tuesday could be key to financial markets

For the week ahead, and away from the obvious influence of ever-volatile stock markets, the two main drivers for the AUD are likely to be domestic economic news flow and China’s PMI figures. 

Key events for the week - Nomura

Analysts at Nomura offered their outlook for the week's key calendar events.