Forex Trading Library

Forex Afternoon Wrap – 08/09

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Commodity risk currencies post strong gains in a risk off sentiment

Key Notes:

  • New Zealand manufacturing sales q/q 0.4% vs. -2.6% previously
  • Japan current account 1.32Tn vs. 1.25Tn
  • Japan Final GDP q/q -0.3% vs. -0.4%
  • Australia NAB business confidence 1 vs. 4 previously
  • China trade balance 60.2bn vs. 48.6bn
  • Japan economy watchers sentiment 49.3 vs. 52.1
  • Switzerland unemployment rate 3.3% vs. 3.3%
  • German trade balance 22.8bn vs. 21.8bn
  • France trade balance -2.2bn vs. -3.2bn
  • Eurozone revised GDP q/q 0.4% vs. 0.3%
  • NFIB small business index 95.9 vs. 96.0

The currency markets opened on a quiet note with the British Pound and the Aussie leading the way. Early Asian trading session saw the New Zealand quarterly manufacturing sales rising at a pace of 0.4% for the quarter, up from -2.6% declines previously. The data helped to push the Kiwi dollar higher gaining 0.69% higher for the day as the Kiwi managed to steadily rise since late yesterday, holding on to its gains to post session highs of 0.63. The Aussie was also trading higher, gaining close to 1% for the day, trading back near the 0.70 handle after the currency seemed to have formed a short term base near 0.69. There was no major economic release from Australia, indicating the rallies in the Kiwi, Aussie and the Canadian dollar pointing to a risk on sentiment.

Japan’s final quarterly GDP for Q2 was more moderate at -0.3%, against previous estimates of -0.4% declines. The Yen was the weakest currency for the day losing -0.55% as USDJPY briefly tested the highs to 120 before easing back to 119.96.

The European session was quiet with German and French trade balances and the Eurozone revised GDP which surprised with 0.4% growth for the second quarter, beating estimates of 0.3%. On an annualized basis, Eurozone GDP stands at 1.5%, above estimates of 1.2%. The upside revision to the GDP could see the ECB holding back from making any additional comments to easing or talks about scaling back its QE program. EURUSD was weaker for the day however, losing -0.08% to the Greenback.

The Swiss Franc came in a second close shedding -0.35% for the day as most of the commodity risk currencies made strong gains against the Swiss Franc.

There were no major releases from the UK but the British Pound continued to push higher with a second consecutive day gains of 0.87% as the currency is seen testing the highs of 1.54 after previously pushing to the lows of 1.51.

The US and Canadian markets open today but there are no major releases scheduled for the remainder of the evening. The Greenback was trading flat for the day and remains range bound for the third consecutive day trading within the highs and lows of 96.64 and 95.72. The weaker Greenback led to gains in the commodity markets with Crude Oil up 2.7% and Gold futures gaining 0.33% for the day.

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