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Bob Mason
Currencies 10

Earlier in the Day:

Economic data released during the Asian session this morning on the lighter side. Key stats included Japan’s June inflation numbers.

For the Japanese Yen

The annual rate of core inflation came in at 0.6% in June, which was in line with a forecasted 0.6%, whilst down from 0.8% in May.

The Japanese Yen moved from ¥107.397 to ¥107.385 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.21% to ¥107.53 against the U.S Dollar.


At the time of writing, the Kiwi Dollar was down by 0.01% to $0.6782, with the Aussie Dollar down by 0.07% to $0.7070.

The pair failed to find support in spite of the upward momentum in the Asian equity markets and dovish FOMC chatter. Comments from the NY FED provided support for U.S Treasury yields early on.

In the Asian equity markets, the majors found support early on. The Nikkei led the way up, with a 1.66% gain at the time of writing. The Hang Seng and CSI300 weren’t far behind, the pair were up by 1.08% and 1.54% respectively. The ASX200 trailed the Asian majors, rising by 0.81%.

A combination of positive economic data out of the U.S and hopes of a near-term FED rate cut provided support early. FED messages were mixed, however. While FED Chair Williams stated that the FED should cut rates at the first sign of trouble, the NY FED looked to soften the effect of Williams’s comments.


The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar. German wholesale inflation figures will provide direction to the EUR in the early part of the session.

While we can expect the EUR to react, geopolitical risk and economic data out of the U.S will also provide direction on the day.

At the time of writing, the EUR was down by 0.12% to $1.1263.

For the Pound

It’s also a quiet day ahead on the economic calendar. With no material stats due out of the UK, the market focus will be on UK politics.

The markets will learn who will lead Britain out of the EU next week. Any chatter on Brexit through the day will influence. We can also expect the markets to consider the stats through the week and what lies ahead on the monetary policy front.

For now, hopes of the EU being willing to renegotiate the backstop part of the Brexit deal has been the Pound’s ally.

At the time of writing, the Pound was down by 0.02% to $1.2546.

Across the Pond

Prelim July consumer sentiment and expectations figures are due out later today. Expect the Dollar to be responsive to the numbers.

Consumer confidence is key, with any deterioration signaling a possible cut back in domestic consumption.

Outside of the numbers, chatter from the Oval Office will also need to be considered on the day.

At the time of writing, the Dollar Spot Index was flat at 96.795.

For the Loonie

It’s a busier day ahead, with key stats due out of Canada later today including May retail sales figures.

The Loonie will be particularly sensitive to today’s numbers, with any weak figures likely to shift sentiment towards BoC monetary policy.

Outside of the numbers, market risk sentiment and influence on crude oil prices will also provide direction on the day.

The Loonie was down 0.02% at C$1.3030, against the U.S Dollar, at the time of writing.

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