The Greenback is on the Back Foot as the Markets Await China Trade Data

The Dollar sees red in the early hours as the markets await China’s trade figures. Trump’s Twitter account may ultimately be the key driver on the day…
Bob Mason
Currency exchange notice board

Earlier in the Day:

It was another relatively busy Asian session this morning. Key stats including New Zealand business PMI and finalized industrial production figures out of Japan. Later in the day, China trade is also due out.

Outside of the stats, the markets reacted further to FED Chair Powell’s testimony to Congress on Thursday and updates from the U.S – China trade talks.

For the Kiwi Dollar

The Business PMI increased from 50.2 to $51.3 in June, falling short of a forecasted rise to 53.1. According to the latest PMI survey,

  • The production and new orders sub-indexes recovered, while the employment sub-index hit its lowest level since Aug-16.
  • Looking at the sub-indexes,
    • The production sub-index bounced back from 46.8 to 51.0, with the new orders sub-index rising from 50.7 to 52.8.
    • Finished stocks were also on the rise, with the sub-index up from 56.8 to 57.6.
    • The employment sub-index fell from 48.5 to 48.0, with the deliveries sub-index falling from 51.2 to 48.9.
  • Optimism was also on the slide, with just 42.9% of those surveyed delivering positive comments, down from 54.3% in May.

The Kiwi Dollar moved from $ 0.66641to $0.66636 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.35% to $0.6684.

For the Japanese Yen

According to finalized figures released by Ministry of Economy, Trade, and Industry, industrial production rose by 2% in May. The finalized number came up short of a prelim and forecasted 2.3% rise.

The Japanese Yen moved from ¥108.391 to ¥108.363 upon release of the data. At the time of writing, the Japanese Yen was up by 0.14% to ¥108.35 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar was up by 0.33% to $0.6997, as the markets awaited trade data out of China.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Finalized Spanish inflation figures for June are due out ahead of the Eurozone’s industrial production figures for May. Barring any revisions to Spain’s inflation numbers, the focus will be on industrial production.

Outside of the stats, geopolitical risk could also influence on the day…

At the time of writing, the EUR was up by 0.14% to $1.1270.

For the Pound

It’s a quiet day ahead on the economic calendar, leaving Brexit and the leadership race on focus.

At the time of writing, the Pound was up 0.18% to $1.2543.

Across the Pond

As the dust settles from FED Chair Powell’s 2-days of testimony, wholesale inflation figures for June are due out later today.

We can expect the Dollar to be sensitive to the numbers.

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 down by 0.13% to 96.922.

For the Loonie

There are no material stats due out, leaving the Loonie in the hands of market risk appetite.

On the crude oil front, the IEA’s monthly report will also influence…

The Loonie was up by 0.28% to C$1.3036, against the U.S Dollar, at the time of writing.

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