Forex Today: Asia risk-off at full steam as TRY sell-off extends, a quiet session ahead

FX today kicked-off the new week on a negative note, as risk-off extended into Asia amid further declines in the Turkish currency, the Lira after the nation’s President Erdogan opposed the measures to ease the economic and currency crisis. Most Emerging Market (EM) currencies – ZAR, RUB, INR tumbled in sync with the TRY while the Euro and Aussie also extended last Friday’s decline. The EUR/USD pair hit fresh thirteen-month lows near 1.1370 amid fears of Turkey’s contagion on the European banking sector. However, the safe-haven Yen benefited the most, having knocking-off USD/JPY closer towards the 110 handle. As a result, the fear gauge, the AUD/JPY cross, was the biggest loser this session, down over 1% to 80.00 levels.

Among other related markets, the Asian equity markets extended their declines, led by a sharp sell-off in the Japanese and Chinese stocks. Meanwhile, both crude benchmarks traded on a cautious footing, as copper futures on Comex slipped below $ 2.73. Gold prices dropped further towards $ 1215, despite the prevalent risk-averse market environment.

Main topics in Asia

Black Swan Friday (that we should have seen coming) as it happened - Turkey risk and the tide of US dollar funding

The markets open today risk-off, of course, following last Friday's dramas over the TRY. However, before looking into the ins-and-outs of the TRY, there is something far more concerning that markets are bringing back to the fore.

Turkey's Erdogan spokesman: "disinformation campaign" to blame for declines

Turkish President Erdogan's Communications Director, Fahrettin Altun, has taken to Twitter in the week's early hours to deliver a word of warning to markets that traders have misinterpreted Turkey's current position …

USD/TRY - Dear Turkish financial minister: If at first you don't succeed, then don't TRY or TRY again

Turkish financial minister trying to calm ease the markets concern and subsequent sell-off in the nation's currency failed at the open this week. 

Fall of the Turkish Lira raises concerns for emerging markets - WSJ

According to the Wall Street Journal, the fall in the TRY in the face of increased US tariffs on aluminum and steel raises uncertainty for investors in emerging markets.

Trump threatens Canada: ‘Will tax cars if we can’t make a NAFTA deal!’ - Twitter

The US President Donald Trump took to Twitter on Saturday and threatened to impose auto tariffs on Canada, should the US and Canada fail to reach a deal on the North Atlantic Free Trade Agreement (NAFTA).

Asian stocks are in decline as risk aversion flames burn brighter

Asian equities are in full retreat for Monday's action with Chinese and Japanese indexes tumbling as trade fears kick into overdrive, with Turkey's currency in free-fall while …

Key Focus ahead

Markets brace for a quiet start to an eventful week ahead, in terms of the economic release, with no macro news due on the cards this Monday from the Euroland, the UK and US docket. However, the developments around the Turkish Lira and the sentiment on the global equities will continue to drive the fx markets today.

The focus shifts to Tuesday’s UK jobs and Wednesday’s US retail sales data for near-term trading impetus.

EUR/USD: Focus on Turkey and Eurozone banking stocks, Put value at 16-month high

The common currency could drop below the immediate support of the 200-week moving average of 1.1357. The EUR could regain poise if Turkey’s economic plan action announcement, due later today, engineers a sharp bullish reversal in Lira.

GBP/USD hits the brakes near 1.2750 on a quiet Monday

Monday's economic calendar is devoid of data for the UK, and traders are going to be focused on Brexit headlines for the day as well as the new Turkey developments.

UK: Key data for next week - Danske Bank

Analysts at Danske Bank present a preview of next week economic reports from the UK. 

Lots of key events for the week ahead - Nomura

Analysts at Nomura offered their outlook for this week's week ahead.