Forex Today: Yen boosted on rising N. Korea tensions, Focus shifts to RBNZ

A classic risk-off theme prevailed in Asia today across the financial markets, sparked by the latest bout of geopolitical tensions escalating between the US and North Korea over the missile threat from the latter. As a result, the safe-haven assets were strongly bid, with Swiss franc gaining the most, followed by gold and Yen.

Meanwhile, the Antipodeans, Asian equities and oil suffered amid reduced investors’ appetite for risk. The Antipodeans received double blow, with the disappointing Chinese CPI figures adding to risk-off driven downside in the prices.

Main topics in Asia

North Korea sending investors into the yen, testing the boundaries of 110

N.Korea's media is retaliating and the yen has picked up a slight bod in thin early Asian trade.

RBA's Kent gives some food for thought to the FX space in Q&E

RBA's Kent has been taking questions in a Q&E session while speaking at a Bloomberg event.

China's CPI m/m rebounds in July, but misses expectations

China's Consumer Price Index (MoM) (July) came at 0.1% vs 0.2% exp and -0.2% last, while Consumer Price Index (YoY) (July) was 1.4% vs 1.5% exp and 1.5% last.

Gold headed to $ 1280 amid increased flight to safety?

Gold prices on Comex extended its rebound from weekly lows and now hovers near 3-day tops of $ 1272.80.

South Korean President calls for complete military overhaul - Yonhap

The news is crossing the wires via Yonhap news that South Korean President Moon has called for a complete overhaul of military to enhance defence readiness. 

Key Focus ahead

Forex today in Europe will be driven by risk-off trades, as escalating North-Korea tensions will have a major bearing on the European markets, while the EUR calendar remains data light for yet another day this week. Focus will remain on the NA calendar, with the Canadian housing data to provide some incentives, followed by Prelim nonfarm productivity and unit labour cost data from the US docket. However, the US releases are expected to virtually have no impact on the fx space, while the US EIA crude stockpiles report will be closely watched for fresh momentum on oil and CAD.

Will EUR/USD cheer risk aversion?

The latest round of Korean tensions spooked markets in Asia. The Japanese Yen is well bid, along with the traditional safe haven assets like gold and the Treasuries. 

GBP/USD stalls recovery, 1.3000 – a tough nut to crack

The GBP bulls are on the defensive amid persisting risk-averse market condition and underlying broad based US dollar strength, keeping any recovery in GBP/USD capped below 1.3000 levels so far this Wednesday.

RBNZ: will be in no hurry to tighten - Nomura

In the opinion of analysts at Nomura, the downshift in the New Zealand inflation trajectory should see the RBNZ continue to stress that it is in no hurry to tighten policy. 

Biggest Event Risk This Week - Will the RBNZ Disappoint?

The biggest event risk this week will be Wednesday's Reserve Bank of New Zealand monetary policy announcement and since we usually publish at the end of the NY trading session, we wanted to share our outlook with our readers now.