Forex Today: Not-dovish RBA boosts the Aussie ; UK services PMI on tap

Forex today witnessed an eventful Asian session this Tuesday, with plenty of event risks for the Aussie traders. The AUD/USD pair enjoyed good two-way businesses, having initially dropped briefly below the 0.72 handle following a big miss on the Australian retail sales and international trade data. However, the bulls fought back control after the RBA’s status quo, with a not so dovish tone as widely expected. The Aussie rallied hard to 0.7265, up 0.50% on the day. The Kiwi tracked the gains its OZ peer and regained the 0.6900 level, as firmer oil prices also helped. The USD/JPY pair stalled its upside once again ahead of the 110 handle, as the sentiment turned sour amid fresh selling seen in the US equity futures and Treasury yields.

Meanwhile, gold prices on Comex caught a fresh bid-wave and inched back to the 1320 level while the greenback traded broadly subdued, consolidating the recent upsurge.

Main Topics in Asia

US Treasury: US intends to 'hold China accountable' for unfair, market-distorting trade

Australia’s retail sales drop -0.4% in December, a big miss on expectations

Australia's trade surplus expands to 3,681 mn in December, a big beat

Fed’s Mester: Fed's wait-and-see approach on rates 'well-calibrated' to economic outlook

Fed: Dinner with Trump was to discuss "recent economic developments" and outlook

WTI: Recovery remains capped below $ 55 despite tightening supplies

USD/INR Technical Analysis: Path of least resistance is to the higher side

Reserve Bank of Australia keeps policy steady, as widely expected

RBA: Main domestic uncertainty remains around household spending

Gold gains 0.20 percent in Asia, focus on treasury yields

Key Focus Ahead

The final services PMI reports from across the Euro area will dominate the EUR macro calendar that will be followed by the key UK services PMI release at 0930 GMT. Markets expect the UK services sector activity to ease to 51.0 in January vs. 51.2 previous. At 1000 GMT, the Eurozone retail sales data will be reported, which is likely to show a sharp drop in the bloc’s consumer spending for the month of December.

The NA session has also a lot of events on the cards, with the Canadian trade figures due to be published at 1330 GMT, followed by the US ISM non-manufacturing and Markit services PMI for the last month. Also, of note remains the API weekly crude stockpiles data that will drop in at 2130 GMT.

EUR/USD: Focus on US ISM non-manufacturing data

A better-than-expected US ISM non-manufacturing data could intensify that debate, forcing investors to price in the possibility of a single rate hike this year. In that case, the EUR/USD pair could fall back to its 50-day moving average (MA), currently at 1.1391. 

GBP/USD drops to a week low ahead of the UK services PMI

The GBP traded a shade weaker than the US Dollar around 1.3030 in Tuesday’s Asian trading. Overall improvement in the risk appetite helped the greenback extend its previous upmove while the Pound traders remained cautious ahead of the UK services PMI release.

UK PM May to say Brexit deal will 'honour' commitments to N. Ireland - Bloomberg

Bloomberg is out with the key highlights from the UK PM Theresa May’s speech that will be delivered later on Tuesday, as she heads to Northern Ireland. She is expected to speak about the UK commitments on the Northern Irish border.

US Services Purchasing Managers' Index: Shutdown, what shutdown?

The non-manufacturing purchasing manager's index from the Institute for Supply Management is expected to decline to 57.2 in January from 58.0 in December.