As Trade Talks Resume, Key Stats Puts the Dollar in Focus

It’s a busy day ahead, with key stats out of the U.S likely to have some influence on the FOMC statement tomorrow.
Bob Mason
Currency exchange notice board

Earlier in the Day:

It was a particularly busy Asian session on the economic calendar this morning.

The Kiwi Dollar, Aussie Dollar, and Japanese Yen were all in action.

Outside of the economic calendar, the markets also continued to consider geopolitical risk on the day. The U.S – China trade talks, Brexit and tensions in the Middle East were in focus.

For the Kiwi Dollar

New Zealand’s June building consents failed to provide direction in the early hours. According to NZ Stats, building consents fell by 3.9% in June, year-on-year, partially reversing a 13.2% rise in May.

The Kiwi Dollar held steady at $0.66324 upon release of the figures. At the time of writing, the Kiwi Dollar was flat at $0.6632.

For the Japanese Yen

Industrial production fell by 3.6% in June, which was worse than a forecast 2% fall. In May, production had risen by 2%.

According to prelim figures released by the Ministry of Economy, Trade, and Industry,

  • Industries that mainly contributed to a decrease were:
    • Motor vehicles
    • Production machinery
    • Electrical machinery, and information and communication electronics equipment
  • Industries that mainly contributed to an increase were:
    • Inorganic and organic chemicals
    • Petroleum and coal products.

The Japanese Yen moved from ¥108.884 to ¥108.82 upon release of the figures, which preceded the BoJ’s monetary policy decision.

Later in the morning, the Bank of Japan released its monetary policy statement and outlook report. While keeping rates unchanged at -0.1%, the BoJ failed to timeline further easing. The July monetary policy statement talked of a willingness of further easing should conditions deteriorate further. However, the minutes also stated that current policy would otherwise be maintained until the spring of 2020.

On the outlook front, the BoJ’s revised downwards both inflation and economic growth forecasts.

The Japanese Yen moved from ¥108.719 to ¥108.732 upon release of the statement and outlook report. At the time of writing, the Japanese Yen was up by 0.16% to ¥108.61 against the U.S Dollar, supported by a less dovish than expected BoJ.

For the Aussie Dollar

According to figures released by the ABS, building approvals fell by 1.2% in June, which was worse than a forecast 0.2% increase. In May, approvals had risen by 0.7%.

The Aussie Dollar moved from $0.69006 to $0.69000 upon release of the figures. At the time of writing, the Aussie Dollar was flat at $0.6902.

Elsewhere

In the Asian equity markets, all the majors made ground through the session. With the U.S – China trade talks resuming, the CSI300 led the way, rising by 0.74% at the time of writing. The Nikkei (+0.31%), ASX200 (+0.34), and the Hang Seng (+0.34%) weren’t far behind.

With trade talks resuming, expectations of a FED rate cut tomorrow also provided some upside early on.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead. Key stats due out of the Eurozone include Germany’s GfK Consumer climate figures and prelim July inflation numbers. Out of France, June consumer spending and GDP figures for the 2nd quarter are also due out.

We can expect Germany’s GFK Consumer Climate and French GDP and consumer spending figures to be the key drivers on the day.

In last week’s press conference, Draghi spoke of expected support from consumer spending. Any softening in consumer confidence and/or consumer spending and expect the EUR to react.

On the geopolitical front, any updates from the resumption of trade talks between the U.S and China and updates from Iran will also influence.

At the time of writing, the EUR was down by 0.04% to $1.1141.

For the Pound

There are no material stats due out of the UK to provide direction for the Pound.

A lack of stats will continue to leave Brexit in focus. Boris Johnson’s stance on Brexit has caused some alarm. Expect more chatter on the day.

At the time of writing, the Pound was down by 0.52% to $1.2145.

Across the Pond

It’s a busy day ahead on the economic calendar. Key stats due out of the U.S include the FED’s preferred Core PCE Price Index numbers and July’s CB Consumer Confidence figures.

While pending home sales and personal spending figures for June will also influence, we can expect inflation and consumer confidence to be the key drivers.

House price figures due out on the day will likely have a muted impact on the Dollar.

Outside of the stats, updates from the U.S – China trade talks and any chatter on Iran will also influence.

At the time of writing, the Dollar Spot Index was up by 0.08% to 98.119.

For the Loonie

There are no material stats due out of Canada to provide the Loonie with direction.

We can expect the Loonie to takes its cues the U.S – China trade talks.

The Loonie was down by 0.07% at C$1.3173, against the U.S Dollar, at the time of writing.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US