Forex Trading Library

Forex Afternoon Wrap – 09/07

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Aussie lifted on strong unemployment data. BoE leaves interest rates unchanged

Key Notes:

  • Japan Core machinery orders m/m 0.6% vs. -4.8%
  • Japan M2 money stock y/y 3.8% vs. 4%
  • Australia employment change 7.3k vs. -2.1k; unemployment rate 6% vs. 6.1%
  • China CPI y/y 1.4% vs. 1.3%; PPI -4.8% vs. -4.6%
  • Japan prelim machine tool orders y/y 6.6% vs. 15% previously
  • German trade balance 22.8bn vs. 20.6bn
  • BoE Official bank rate 0.5% vs. 0.5%
  • Canada housing starts 203k vs. 191k
  • Canada NHPI m/m 0.2% vs. 0.1%
  • US Weekly unemployment claims 297k vs. 274k

Later:

  • FOMC member Brainard speech
  • US natural gas storage

The Asian trading session got off to a busy start with the Australia Jobs report on the tap. For the month of June, Australia’s unemployment rate dropped to 6%, beating estimates that called for an increase to 6.1%, while the previous month’s unemployment rate was revised to 5.9% from 6% previously estimated. The Aussie initially gained on the news, posting a session high to 0.749 only to ease back lower. However the currency remains well supported and is likely to end the day in the positive. The Kiwi was largely flat today after posting strong gains for the past daily session. NZDUSD was trading at 0.674 at the time of writing and is trading near yesterday’s high. A close above 0.6746 is required for the currency to gain higher in the near term.

The Japanese Yen eased in today’s trading session after USDJPY declined to 120.55 lows before lifting higher. For the day, USDJPY was up 0.65%, trading near 121.5 ahead of the US trading session.

The European trading session was mostly quiet today with no major economic releases or marking moving headlines from Greece. As of now, Greece is expected to get back to the Eurogroup with its reforms proposal and the group is due to meet on Sunday again. The ECB kept the ELA funding unchanged at 89billion Euro. The Euro posted a session high to 1.1119 but eased quickly to trade back close to the opening price today.

The Bank of England met for its monthly monetary policy meeting today. As widely expected, the UK Central Bank left policy unchanged while highlighting the risks of the Greece debt crisis and a mixed economic data from the UK. UK’s interest rates stand at 0.5% since March 2009 while the volume of its asset purchase program was unchanged at £375 billion. Focus now shifts to the MPC votes for the rate hikes with expectations that the BoE’s monetary policy hawks, Martin Weale and Ian McCafferty could shift back to voting for rate hikes. The British Pound was unchanged on the non-event, but the Cable was trading in the positive after two straight sessions of losses earlier this week.

The US trading session is quiet today with no major data from the US. Canada’s housing starts for the month of June rose 203k beating estimates of 191k. The previous month’s data was revised lower to 197k from 202k. Canada’s National House price index rose 0.2% for the month above 0.1% estimates. The US weekly unemployment claims missed forecasts of 274k and rose 297k, marking a second straight week of rise in the weekly unemployment claims. USDCAD fell from daily session highs of 1.2737 to trade near 1.267.

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