Forex Today: GBP underperforms in Asia, EZ data, Fed speaks eyed

The British pound emerged the weakest of all major currencies in the Asian session this Monday, as ‘hard-Brexit’ induced anxiety resurfaced into markets, while at the same time the Japanese currency also lost ground amid higher treasury yields and return of broad based USD demand, as the Asian traders cheered US employment data.

Also, reports of a drop in the Chinese fx reserves for a sixth-month in a row also grabbed some attention in Asia this Monday. While the Aussie got a lift from better-than expected Australian building approvals data.

Focus now shifts towards the German industrial production and trade data lined up for release ahead of the Eurozone Sentix Investor Confidence and unemployment rate numbers. While the NA session offers the US LMCI data alongside speeches from Fed officials Rosengren and Lockhart. Further, the BOC Business Outlook Survey will be also eyed.

Main topics in Asia

Australia's Nov building approvals beat expectations

Australia's building approvals (Nov) came at +7.0% m/m vs +4.5% exp and -12.6% last, while the yearly reading stood at -4.8%y/y vs -5.7% exp and -24.9% last.

Australia government warns the rally in iron ore and coal may not last

The forecast report from the Australian government’s chief economist Mark Cully suggests the party for the miners could be over in 2017.

China reserves slumped $320 billion last year as yuan tumbled – BBG

Over the weekend, the PBOC came out with their latest FX reserves data, revealing that the country’s reserves fell for the sixth straight month in December, Bloomberg reported.

Fed’s Williams: Possibility of fiscal stimulus is “really not that important” for rate changes this year - FT

In an interview with the Financial Times (FT) San Francisco Fed President, John Williams, posted optimistic comments following higher wage inflation figures published last Friday.

Key focus for the day ahead

EUR/USD: Bears eyeing a test of 1.0500 ahead of German data?

In the day ahead, the US dollar is expected to remain broadly bid amid renewed optimism on the US labor market, while the euro may seek some support from upcoming German industrial production and trade balance data, both expected to arrive a tad better than the previous readings.

Australia: Retail sales likely to print 0.5% m/m for November – RBC CM

Research Team at RBC Capital Markets notes that the Australia’s growth slowed around midyear, with a variety of indicators including retail sales corroborating the negative print recorded for overall output in Q3.

Key economic releases for the week ahead - Rabobank

Michael Every Head of FMR at Rabobank, lists down the key economic releases for the week ahead.