Forex Today: N. Korea-led risk-off drives Asia, UK PMI, Fed minutes ahead

A classic risk-off scenario persisted in the Asian session on Wednesday, as North Korean tensions escalated following its leader Kim Jong Un’s comments and US’ request to the UN Security Council. As a result, safe-havens were strongly bid at the expense of the risk/ higher-yielding assets such as equities, GBP etc. Meanwhile, the Antipodeans stood resilient to risk-aversion and downbeat Chinese data, as broad based US dollar weakness offered some support.

Next of note for Forex today remains the final services PMI reports from across the Euro area, Eurozone retail sales data and UK services PMI data due on the cards in Europe, while from the US docket, we have the factory orders and IBD/TIPP economic optimism data. Also, the minutes of the FOMC June meeting is slated for release later in the American afternoon.

Main topics in Asia

OPEC oil exports dropped in June

OPEC’s total oil exports stood at 25.187 million barrels per day (bpd), down from 25.424 million bpd in May, and down from 25.493 million bpd in October 2016.

Kim Jong Un “firmly determined” to test ICBM that can hit US mainland – KCNA

Kim is “firmly determined and committed” to test an ICBM that can hit the US mainland within this year, the state-run Korean Central News Agency (KCNA) said today.

PBOC – Will keep liquidity relatively stable

People’s Bank of China statement released on Tuesday says the bank will keep liquidity relatively stable and it shall ensure that credit is growing at a reasonable pace.

China’s Caixin June Services PMI surprises negatively

China’s Caixin Services PMI came in at 51.6 in June vs 52.8 last and 52.9 expectations.

Key Focus ahead

EUR/USD benefits from risk-off and weaker DXY ahead of PMIs, FOMC

The EUR/USD pair jumped back on the bid in the Asian trades, as the USD recovery stalled amid repositioning ahead of the FOMC minutes due later today. 

UK: Downside risks for services PMI - TDS

Analysts at TDS are already looking for downside risks for today’s UK services PMI, forecasting a 1pt fall to 52.8 (mkt 53.5).

GBP/USD Forecast: bearish below 1.29 mark, UK PMI and FOMC minutes awaited

The pair, however, managed to find some buying interest at lower levels as traders now look forward to today's release of UK services PMI print for some fresh impetus. 

UN Security Council to meet on Wednesday 1900 GMT to discuss N. Korea's missile launch

UN Security Council calls a meeting on Wednesday 1900 GMT to discuss North Korea's missile launch, Reuters reports.