Forex Trading Library

Forex Afternoon Wrap – 15/06

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Euro under pressure as Greece talks stall

Key Notes:

  • Switzerland PPI m/m -0.8% vs. 0.1%; y/y -6% vs. -5.1%
  • Switzerland retail sales y/y 1.6% vs. -2.8%
  • Canada manufacturing sales m/m -2.1% vs. -0.5%
  • US Empire state manufacturing index -1.98 vs. 6

Later:

  • ECB President Draghi speech
  • US Capacity utilization rate
  • US Industrial production
  • US NAHB housing market index
  • BoE’s Forbes speaks

The currency markets Monday on a subdued note with the Euro gapping lower across the board. It was the failed Greece talks over the weekend that saw the Euro weaken on the market open today. The Asian trading session was quiet with no major news releases scheduled, leading to the markets drifting due to lack of data.

The Aussie dollar was seen trading within Friday’s range for the most part of today, with prices currently testing Friday’s highs near 0.7758. The Kiwi dollar was also trading sideways, well within Friday’s range. The pattern near the lows of 0.697 seems to be making a basing pattern indicating the possibility of an upside breakout. However, there is still scope for further declines beyond the more recent lows at 0.696.

The Japanese Yen also made no major moves with most of the Yen crosses seen trading within a range. USDJPY remains within Friday’s high and low.

The European trading session saw the release of Switzerland’s Producer Price Index, which missed estimates declining -0.8% on the month and -6% for the year, indicating a continued downward pressure on consumer inflation.

The Greece debt negotiations once again stole the headlines with the June 18th deadline now looming very close. Failure to reach an agreement between Greece and its lenders could potentially push the country to default on its IMF repayments which the country has bundled together as a single payment towards end of June. In terms of comprise, so far none of the parties concerned have managed to meet halfway, although news outlets cite that Greece has managed to compromise but the major demands or issues voiced by the lenders were not met, leading into a continued deadlock.

The Euro was subdued across the board with the EURUSD trading near 1.122 and almost practically unchanged for the day. The Pound Sterling was a bit weaker as the Cable declined near the opening highs of 1.5556 and was trading within Friday’s range.

The US trading session saw the release of Canadian manufacturing sales which shrank -2.1% below estimates of -0.5%. Previous month’s sales numbers were also revised lower from 2.9% to 2.7%. The US Empire State Manufacturing was also negative at -1.98, below estimates of 6. The US Dollar Index was seen declining on the news release.

Later in the day, ECB President Mario Draghi is due to give a speech at the EU parliament in Brussels which could bring some volatility to the Euro crosses. From the US, capacity utilization and industrial production numbers are also due for release. However, it seems likely that the markets will close within their range ahead of a busy week.

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