Currencies, Asian Stocks, US Tax Reform ahead of Yellen’s Speech

Morning breaks with fresh news on currencies, Asian stocks, the US tax reform ahead of Yellen’s speech. Here are a few major events driving the market on Friday.

Federal Reserve Chair Janet Yellen will speak today in the late hours of the night, when market closes at 11:30pm GMT. Her speech will most likely have an influence on the USD movement, causing some volatility in the market.

The first currency in our focus, USD gains momentum as the US Senate gets the tax reform hurdle out of the way. USDJPY reached a 2-week high after following a steady ascending trend, hitting 113.18 as T-yields move up on the US tax reform news, which in turn, fuels demand of the greenback. The JPY also tends to gain some strength, reacting cautiously to the prospects of the crisis in the Korean Peninsula likely to extend over the weekend.

NZD falls to a 0.69851 eye to 11th April low. As the RBNZ’s mandate is still uncertain, the kiwi remains dipped.

In Europe, desks react positively to the US tax news by maintaining the USD well bid. In comparison, EURGBP is directly prone to the influence of the still inconclusive yet ongoing Brexit negotiations and the Catalonia events.

GBPUSD might also slip to 1.13107, hitting the 100-DMA level, on speculation that European leaders might react negatively to the lack of progress in the UK-EU divorce.

EURUSD loses approximately 0.30%, while the US-German 10-year yield spread moves up in reaction to the US tax reform news. The pair is likely to remain on its back foot at least for today.

Ultimately, Asian stocks shed gains on Friday, as the dollar rallied following the legislators’ approval of a budget plan for 2018 fiscal year. The financial blueprint allows for the Republicans to pursue the implementation of a tax-cut package without needing any support from the Democrats.