Forex Trading Library

Forex Afternoon Wrap – 29/06

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Euro, single currency resilient as EURUSD recovers most of the losses from earlier in the day

Key Notes:

  • Japan retail sales y/y 3% vs. 2.1%
  • Japan prelim industrial production m/m -2.2% vs. -0.8%
  • Germany preliminary CPI m/m -0.1% vs. 0.1%
  • Spain preliminary CPI y/y 0.1% vs. -0.1%
  • UK net lending to individuals m/m 3.1bn vs. 3.3bn; M4 money supply 0.5% vs. 0.5%
  • Canada RMPI m/m 4.4% vs. 4.4%; IPPI m/m 0.5% vs. 0.4%

Later:

  • US Pending home sales

The financial markets opened on a very bearish note this morning after the weekend developments saw the Greece debt negotiations breaking down and with Greece Premier, Alexis Tsipras calling for a referendum. The flight to safe haven was evident as the Japanese Yen strengthened throughout the day which was also supported by better than expected retail sales, which increased 3% for the year. Preliminary industrial production fell -2.2% against estimates of -0.8%. The Aussie and the Kiwi dollars were under pressure since early trading as investors flocked to bid up the Yen, shedding their exposure to the risky/commodity currencies.

AUDUSD gapped lower to open the week at 0.7624 and managed to recover from the lows to cover the opening gap. The currency is now trading higher at 0.766, gaining 0.14% for the day at the time of writing. The NZDUSD was however subdued although the Kiwi gained 0.07% against the Greenback.

USDJPY lost close to 0.9% for the day at the time of writing, with the opening gap from Friday’s close still waiting to be filled.

From Europe, economic data included Germany and Spain CPI which came out mixed. However, the single currency was focused on the Greece theme as the government imposed capital controls limiting ATM withdrawals and overseas transfers as the ECB did not raise the ELA limit and left it unchanged from Friday’s 89billion Euro ceiling. It is expected that the capital controls which will remain in effect until the referendum on July 5th will help reduce the Greek banks from seeking from ELA funds.

With the markets in a panic mode, the Euro opened the week on a very bearish note gapping lower across the board. With the Euro falling, SNB Chief, Thomas Jordan announced that the Swiss Bank was intervening in the financial markets to bid up the Euro in an effort to stabilize the strengthening Swiss Franc. Upon the news, the Swiss Franc started to lose ground, while the Euro found renewed strength.

EURUSD which gapped down by close to 150pips has recovered most of the losses at the time of writing, largely thanks to the SNB’s intervention.

The US trading session is quiet today with the exception of the US pending home sales due later in the evening.

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