Forex Today: Trump trade unwinds in Asia, UK jobs, EZ & US CPI - Key

A quiet Asian affair, with the USD bulls garner some support as Trump trade unwinds and prompts a corrective rally in the US dollar versus its main competitors. The Asian equities dropped further, sending the Japanese Nikkei to fresh five-week lows on overnight rally in the yen.

While we had a dozen of headlines from China crossing the wires in Asia, with the Chinese authorities trying every way out to curb capital outflows and step-up economic growth.

Moving on, there are plenty of risk events to be reported this Wednesday, with the UK employment to kick-start the European calendar, followed by the final CPI reading from the Euroland. The NA session holds the release of the US inflation and industrial figures, followed by Bank of Canada (BOC) rate decision and a slew of Fedspeaks, including the one from Fed Chair Yellen.

Main topics in Asia

Fed's Williams: Further gradual U.S. interest rate hikes likely appropriate

San Francisco Fed's President John Williams crossed the wires, via Reuters, noting that he sees unemployment rate bottoming out at 4.5 pct in the next year.

China said to intervene in stock market - BBG

Bloomberg carries an article this Wednesday, quoting people familiar with the matter that China is taking steps to support its stock market this week.

GBP/USD consolidates 4 big figures UK May & Trump-led rally

The GBP/USD pair embarks upon a corrective mode on Wednesday, after having faced fresh offers at 50-DMA, as the bulls consolidate the recent massive upsurge. 

Asian stocks ex-China keep losses amid Trump’s comments

Most major Asian indices prolong its losing streak into a third day this Wednesday, as yesterday’s massive gains in the yen versus the greenback continue exert downward pressure on the exports stocks, which in turn sent the Nikkei 225 index to fresh five-week lows.

PBOC cash injections surge to record $60 billion before Lunar New Year holidays

The Chinese central bank (PBOC) injected a record amount of funds into the financial system on increased demand for cash surges ahead of the Lunar New Year holidays starting next week, Bloomberg reports.

Key focus for the day ahead

EUR/USD drops further to test daily pivot ahead of CPIs

Focus now shifts towards the fundamentals from both continents, with the inflation data release to dominate the moves in EUR/USD in the day ahead.

GBP/JPY drops ahead of UK wage growth data

The British Pound is heading into the data release on a strong footing, courtesy of UK PM May’s ‘Hard Brexit’ talk on Tuesday. A strong wage growth figure could yield a break above 140.15 levels. 

NZ: Expect 0.3% q/q headline CPI result for the December 2016 quarter - ANZ

Phil Borkin, Senior Economist at ANZ, expects a 0.3% q/q headline CPI result for the December 2016 quarter (released 26th January) of NZ, which is a touch above the RBNZ’s November MPS pick (0.2%).