Forex Today: Aussie rallies, Yen slips in Asia, Eurozone trade in focus

Forex today witnessed yet another round of broad-based USD selling, which triggered a massive buying interest around the Antipodeans, with the Aussie having emerged the top gainer while the Yen was the biggest loser, despite positive Asian equities and higher gold prices. Meanwhile, both the EUR and GBP consolidated near multi-year tops, awaiting fresh impetus from the session ahead.

Main topics in Asia

US inflation expectations hit 10-month high

The US 10-year breakeven inflation rate (the difference between the 10-year T-yield and yield on the 10-year treasury inflation protected securities) rose above 2 percent last week; the highest since March. 

PBOC Injects CNY 398 Bln Yuan via 1-year MLF, Rates unchanged

The Chinese central bank, PBOC, is out with a brief statement, announcing that it injected CNY 398 billion via one-year medium-term lending facility (MLF).

Scotland's Sturgeon to decide on pushing for indyref2 by end of year - BBC

Speaking on the BBC's Andrew Marr Programme, Scotland's First Minister Nicola Sturgeon said she will be able to make a judgment on whether to back a second referendum on Scottish independence by the end of this year. 

Bundesbank to include Yuan in its reserves

Comments from Bundesbank board member Andreas Dombfret indicates Germany's apex bank has decided to include the Chinese Yuan in its currency reserves. 

Yuan rises to 20-month high, AUD/USD clocks 3-1/2 month highs

The AUD caught another bid wave in the last few minutes, seemingly due to a big drop in the USD/CNY fix.

Key Focus ahead

Today’s economic calendar set-off the weak on a quiet note, with no significant event due on the cards from the Euroland and the UK, expect for the Eurozone trade balance. Meanwhile, the US markets are closed in observance of Martin Luther King Day and hence, thin liquidity and minimal volatility will continue to persist in the day ahead.

However, the speech from the BOE MPC member Tenreyro will be closely eyed in the NA session, especially with Cable trading near the highest levels since the Brexit vote near 1.3750 levels.

EUR/USD in bullish consolidation near 1.2200 ahead of EZ data

The EUR/USD pair prolonged its upward trajectory and went on to hit fresh three-year highs at 1.2218, before having eased slightly to now consolidate near the 1.22 handle, as the bulls await fresh impetus for the next push higher.

GBP/USD - 1.39 on the cards?

Having defended 1.35 levels since the beginning of the year, the GBP/USD chewed through strong resistance in the 1.3659-1.3710 area on Friday and closed above 1.37 for the first time since June 2016.

The Week Ahead: Weak USD, Strong EUR, and BoC-Driven CAD in Focus

The currency focus for the week ahead, therefore, will remain on both the beleaguered US dollar and exceptionally buoyant euro, as well as the Canadian dollar due to the potentially pivotal rate decision from the Bank of Canada.

The week ahead's key scheduled calendar events - Nomura

Analysts at Nomura Bank offered a preview of this week's key events from the economic calendar.