Japan All Industry Activity (MoM) Jan: 0.1% (Est 0.00%) (Prior -0.2% rev)
PBoC Fixes USDCNY Reference Rate At 6.8889 (Prev 6.9071)
Most of the Asian stock indices declined overnight. Sentiment turned negative in yesterday’s US trading session, as investors are starting to doubt that US President Donald Trump will be able to pass his planned tax reform. The S&P 500 finished the trading day with a loss greater than 1 percent. Overnight, the Nikkei lost almost 2 percent on the day, while the Australian ASX 200 fell around 1.50 percent.
The Dollar remains under pressure as well. EUR/USD broke above 1.08 yesterday, and while it failed to clear resistance at 1.0825, a breakout seems imminent. Meanwhile, GBP/USD broke above trendline resistance and is approaching 1.25.
Only the commodity currencies failed to benefit from the Dollar weakness. The Australian and New Zealand Dollar fell as the decrease in risk appetite weighed on the currencies. AUD/USD declined from 0.7750 to 0.7650, while NZD/USD dropped from 0.7090 to 0.7015.