Economic Data Puts the EUR and the Greenback in the Spotlight

Earlier in the Day:

It’s was another busy start to the day on the economic calendar this morning. The Japanese Yen, the Kiwi Dollar, and the Aussie Dollar were in action, with economic data from China also in focus.

For the Japanese Yen

Capital spending slid by 11.30% in the 2^nd quarter, year-on-year. In the 1^st quarter, capital spending had risen by 0.10%. Economists had forecast a 4.3% rise.

The Japanese Yen moved from ¥105.962 to ¥105.98 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.17% ¥105.73 against the U.S Dollar

For the Kiwi Dollar

Building consents fell by 4.5% in July, following a 0.7% increase in June.

According to NZ Stats,

• More than 10,000 new homes were consented in the last 3-months, the largest rolling 3-month total since the 1970s.

The Kiwi Dollar moved from $0.67346 to $0.67342 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.34% to $0.6756.

For the Aussie Dollar

It was a busy morning.

The AIG Manufacturing Index fell from 53.5 to 49.3 in August.

According to the August Survey,

• Manufacturers related to the F&B, medical and pharmaceutical products, and some parts of freight transport reported solid conditions.
• Other sectors reported lower demand due to the COVID-19 recession.

The Aussie Dollar moved from $0.73738 to $0.73761 upon release of the figures that preceded the RBA’s monetary policy decision.

Building approvals jumped by 12% in July, reversing a 4.9% slide in June.

According to the ABS,

• The rise was driven by private sector dwellings excluding houses, which surged by 22.7%.
• Approvals for private sector houses increased by 8.5%, which was the strongest monthly increase since Jan-14.

The Aussie Dollar moved from $0.73787 to $0.73864 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.33% to $0.7400. Later this morning the RBA monetary policy decision will be the main event.

Out of China

The CAIXIN Manufacturing PMI increased from 52.8 to 53.1 in August. Economists had forecast a fall to 52.6.

According to the August survey,

• The improvement across the manufacturing sector was one of the most marked since January 2011.
• Steeper increases in both output and new orders drove the PMI higher.
• Total new work expanded at the fastest pace since the start of 2011.
• While domestic orders continued to rise, new export orders rose for the 1^st time since December 2019.
• As a result of the pickup in new orders, the rate of output growth was the most marked since January 2011.
• Employment saw a fractional decline, with the pace of decline the slowest in the year to date.
• In spite of the better environment, the degree of optimism slipped to a 3-month low. Concerns over the pandemic and for how long the pandemic would impact operations and demand weighed.

The Aussie Dollar moved from $0.73864 to $0.73990 upon release of the figures.

The Day Ahead:

For the EUR

It’s a particularly busy day ahead on the economic calendar. Key stats include August manufacturing PMIs for Italy and Spain and unemployment figures from Germany.

Other stats on the day include finalized PMIs for France, Germany, and the Eurozone and Eurozone inflation and unemployment figures for August.

Expect Italy’s PMI and any revisions to German and Eurozone PMIs along with German unemployment figures to have the greatest impact.

The ECB remains reliant upon consumption to support economic recovery. German employment conditions will need to avoid deterioration to support the expectation of a V-shaped economic recovery.

At the time of writing, the EUR was up by 0.31% to $1.1973.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. Key stats include the UK’s finalized manufacturing PMI for August.

Expect any revisions to influence. Away from the economic calendar, Brexit chatter will continue to be an influence.

At the time of writing, the Pound was up by 0.18% to $1.3394.

Across the Pond

It’s a busy day ahead in a busy week for the U.S Dollar. Key stats include the market’s preferred ISM Manufacturing PMI for August.

The finalized Markit manufacturing PMI is also due out but will likely have a muted impact on the day.

Away from the economic calendar, the markets will need to continue monitoring chatter from Washington.

The Dollar Spot Index was down by 0.23% to 91.929 at the time of writing.

For the Loonie

It’s a particularly quiet day ahead on the economic data front. There are no material stats due out of Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of the PMI numbers. We can expect the PMIs to influence market sentiment towards the global economic outlook and demand for crude.

At the time of writing, the Loonie was up by 0.20% to C$1.3021 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.