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Brexit and U.S Retail Sales Put the GBP and the USD in Focus

It’s risk-on through the Asian session as the markets respond to the ECB move. On the day ahead, the focus will be on Brexit and U.S retail sales figures.
Bob Mason
Forex Markets Currency Trading Concept.

Earlier in the Day:

The economic calendar was on the quieter side through the Asian session this morning.

Economic data included August Business PMI numbers out of New Zealand and finalized July industrial production figures out of Japan.

Outside of the stats, the markets reacted further to the ECB monetary policy decision from Thursday and inflation figures from the U.S.

On the geopolitical front, the stage is set for the U.S and China to resume talks next month, which is market positive. As we have seen in the past though, pre-talk tweeting can be market destructive.

For Kiwi Dollar

The NZ Business PMI rose from 48.2 to 48.4 in August.

The PMI survey had yet to be made available at the time of writing.

The Kiwi Dollar moved from $0.64053 to $0.64015 upon release of the figures. At the time of writing, the Kiwi Dollar up by 0.02% to $0.6407.

For the Japanese Yen

Industrial production increased by 1.3% in July, according to finalized figures, which was in line with prelim and forecast. In June, industrial production had tumbled by 3.3%.

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

  • Industries that mainly contributed to the increase were:
    • Motor vehicles
    • Chemicals (excl. inorganic, organic chemicals, and medicine)
    • Pulp, paper and paper products.
  • Industries that mainly contributed to a decreased were:
    • Inorganic and organic chemicals.
    • Petroleum and coal products.
    • Electrical machinery, and information and communication electronics.
  • Forecasts are for industrial production to fall by 1.6% in September.

The Japanese Yen moved from ¥108.137 to ¥108.141 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.14% to ¥108.14 against the U.S Dollar.

Elsewhere

The Aussie Dollar was up by 0.12% to $0.6874, at the time of writing. An easing in geopolitical risk provided support early on.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Key stats include finalized August inflation figures out of Spain and July trade and 2nd quarter wage growth figures for the Eurozone.

We can expect wage growth and trade data to have the greatest influence on the EUR.

Outside of the stats, will there be any Trump threats of tariffs following the ECB’s monetary policy decision on Thursday?

On the geopolitical front, there’s Brexit chatter to continue to monitor through the day.

At the time of writing, the EUR was up by 0.03% to $1.1068.

For the Pound

It’s a quiet day ahead on the data front. There are no material stats to provide the Pound with direction through the day.

What’s next for the British Prime Minister who, until now, has failed at every hurdle since moving into number 10.

Things could go from bad to worse should the English courts also rule that the suspension of Parliament was unlawful… Scotland’s Court of Sessions deemed the suspension unlawful after an appeal to the original ruling that had favored the Brexiteers…

While the Pro-Remainers have racked up a number of victories, news trickling through suggests that the Government is busy in bilateral talks with individual EU member states.

Can Johnson have enough agreements in place to give MPs a vote in favor of a no-deal Brexit come 31st October? Well, a no-deal in the sense of no single deal with the EU…

At the time of writing, the Pound was up by 0.12% to $1.2350.

Across the Pond

It’s a busy day ahead on the economic calendar, with retail sales, business inventories and consumer sentiment figures due out of the U.S.

We can expect retail sales and consumer sentiment figures to have the most material influence on the Dollar.

Outside of the numbers, Trump’s Twitter account will also need monitoring…

The Dollar Spot Index was up by 0.03% to 98.336 at the time of writing.

For the Loonie

It’s another quiet day ahead on the economic calendar. There are no material stats due out of Canada today.

A lack of stats will leave the Loonie in the hands of market risk sentiment and direction of crude oil prices on the day.

The Loonie was down by 0.08% at C$1.3221, against the U.S Dollar, at the time of writing.

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