Inflation Figures and the FOMC Meeting Minutes Put the Pound, the Loonie, and the Dollar in Focus

Earlier in the Day:

It was a busy start to the day on the economic calendar this morning. The Japanese Yen was in action this morning. On the monetary policy front, the RBNZ delivered its August monetary policy decision.

For the Japanese Yen

Trade data and machinery orders were in focus this morning.

In July, Japan’s trade surplus widened from ¥384.0bn to ¥441.9bn. Economists had forecast a narrowing to ¥202.3bn.

According to figures released by the  Ministry of Finance,

• Exports increased by 37.0% year-on-year.
  • Exports to China were up 18.9%, with exports to the U.S up 26.8%.
  • To Germany and the UK, exports were up 35.9% and by 22.0% respectively.
• Imports rose by 28.5%, year-on-year.
  • Imports from China increased by 12.4% and by 24.4% fom the U.S.
  • From Europe, imports rose by 14.2%.

In June, machinery orders decreased by 1.5%, month-on-month, versus a forecasted 2.8% fall. Orders had jumped by 7.8% in May. Year-on-year, orders were up 18.6% versus a forecasted 15.8%. In May, machinery orders had been up 12.2%.

The Japanese Yen moved from ¥109.569 to ¥109.558 upon release of the figures. At the time of writing, the Japanese Yen was up 0.05% to ¥109.550 against the U.S Dollar.

For the Kiwi Dollar

The RBNZ left cash rates unchanged, with the RBNZ citing uncertainty over the latest lockdown as the reason for the pause.

The Kiwi Dollar slid from $0.69429 to $0.68683 upon release of the statement before finding support. At the time of writing, the Kiwi Dollar was up by 0.03% to $0.6921, as the markets shift focus to the RBNZ press conference.

Elsewhere

The Aussie Dollar was up by 0.10% to $0.7260.

The Day Ahead

For the EUR

It’s a relatively quiet day ahead on the economic data front. Finalized July inflation figures for the Eurozone are due out later today.

Barring a revision from prelim figures, however, the numbers should have a muted impact on the EUR.

At the time of writing, the EUR was up by 0.08% to $1.1719.

For the Pound

It’s a relatively busy day ahead on the economic calendar. Inflation numbers for July are due out. With the BoE having raised concerns over inflation, another pickup in inflationary pressure should deliver strong support for the Pound.

While the number of hawks are few and far between, a sharp pickup in inflationary pressure may test MPC fence sitters.

At the time of writing, the Pound was up by 0.08% to $1.3752.

Across the Pond

It’s a quiet day ahead on the economic calendar. Housing sector data for July will be in focus later today.

We don’t expect the numbers to influence, however.

On the monetary policy front, the FOMC meeting minutes will be key, however. Expect any hawkish chatter to drive Dollar demand.

At the time of writing, the U.S Dollar Spot Index was down by 0.01% to 93.120.

For the Loonie

It’s a relatively quiet day on the economic calendar. Inflation figures for July are due out later today.

While market risk sentiment and crude oil inventories will be key, today’s inflation figures will also influence.

At the time of writing, the Loonie was up by 0.07% to C$1.2620 against the U.S Dollar.

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