Economic Data Puts the EUR and the U.S Dollar in Focus as U.S – China Tension Lingers

Earlier in the Day:

It’s was a relatively busy start to the day on the economic calendar this morning. The Kiwi Dollar and the Aussie Dollar were in action, with economic data from the UK also in focus in the early part of the day.

Away from the economic calendar, riskier assets continued to find support from Trump’s executive orders from the weekend.

On the geopolitical risk front, rising tension between the U.S and China was of little influence early on. With trade talks set to resume at the end of the week, hopes are for an easing in tensions.

For the Kiwi Dollar

Electronic card retail sales increased by 1.1% in July, following a 16.3% surge in June. Compared with July 2019, spending increased by 11%.

According to NZ Stats,

• For the 3^rd month in a row, spending on durables continued to recover from the COVID-19 driven slump in April.
• Spending on durable goods jumped by 20% compared with July 2019.
• Card spending increased for all but one of the 6-retail sectors.
• The 2^nd highest spending was in supermarkets, specialized foods, and liquor stores, which rose by 12%.
• While accommodation spending remained low, increased spending on eating out delivered a boost for the hospitality sector, which increased by 5.9%.

The Kiwi Dollar moved from $0.65916 to $0.65896 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.36% to $0.6615.

For the Aussie Dollar

In June, NAB Business Confidence fell from 0 to -14, ending a run of 3 consecutive sizeable increases in confidence. Economists had forecast a fall to -1.

Concerns over the spike in new COVID-19 cases and reintroduction of lockdown measures in Victoria contributed.

The Aussie Dollar moved from $0.71536 to $0.71619 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.34% to $0.7174.

Out of UK

The BRC Retail Sales Monitor increased by 4.30% in July, year-on-year, following a 10.9% jump in June, according to the July report.

The Pound moved from $1.30734 to $1.30728 against the Dollar upon release of the figures.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.06% to ¥106.02 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. ZEW Economic Sentiment figures for August are due out for Germany and the Eurozone.

Following the lack of stats on Monday, we can expect some EUR sensitivity to Germany and the Eurozone sentiment figures.

The markets will likely brush aside Germany’s Current Conditions Index, however.

Away from the economic calendar, expect geopolitics to also be a factor on the day.

At the time of writing, the EUR was up by 0.09% to $1.1749.

For the Pound

It’s a busy day ahead on the economic calendar. June’s unemployment rate and July’s claimant count are due out later this morning, along with employment change figures for June.

We would expect July’s claimant count figures to have the greatest impact on the day.

Away from the economic calendar, any chatter on Brexit and trade negotiations will also need monitoring.

At the time of writing, the Pound was up by 0.16% to $1.3094.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar. Key stats include July’s wholesale inflation figures.

Following the pickup in private sector activity in June and July, the markets will be looking for a pickup in wholesale inflationary pressures.

On the geopolitical front, chatter from the Oval Office and Beijing will also influence on the day.

At the time of writing, the Dollar Spot Index was down by 0.02% to 93.563.

For the Loonie

After a quiet day ahead, with economic data limited to June housing starts and building permits.

The numbers are unlikely to have too much influence on the Loonie, however, as the markets focus on U.S – China tensions. Reports from Beijing of plans to adhere to the phase 1 agreement ahead of trade talks was Loonie positive.

At the time of writing, the Loonie was up by 0.16% to C$1.3329 against the U.S Dollar.

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