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Bob Mason
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Earlier in the Day:

It’s was a relatively busy start to the day on the economic calendar this morning. The Japanese Yen and the Aussie Dollar were in action once more.

While the stats and monetary policy were in focus, the Asian markets also responded to the positive PMIs from Europe and the U.S.

Away from the economic calendar, COVID-19, geopolitics, and the U.S stimulus package continued to be an area of focus.

For the Japanese Yen

July inflation figures were in focus. Tokyo’s core annual rate of inflation picked up from 0.2% to 0.4%. Economists had forecast for inflation to hold steady at 0.2%.

According to the Ministry of Internal Affairs and Communication.

  • Prices for clothing and footwear (+2.4%), furniture and household utensils (+2.2%), and culture and recreation (+2.1%) provided support.
  • There were also increases in prices for medical care (+1.1%) and transportation and communication (+0.9%).
  • An 8.6% slide in prices for education and a 1.5% fall in prices for fuel, light, and water charges weighed, however.

The Japanese Yen moved from ¥106.055 to ¥106.043 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.07% to ¥105.90 against the U.S Dollar.

For the Aussie Dollar

It was a busy morning, with trade data and retail sales figures in focus ahead of the RBA’s monetary policy decision later this morning.

In June, Australia’s trade surplus widened from A$8.025bn to A$8.202bn. Economists had forecast a widening to A$8.800bn.

According to the ABS,

  • Goods and services credits increased by A$1,219m (3%) to A$36,186m.
    • Non-monetary gold exports rose A$687m (41%).
    • There were also increases in the exports of non-rural goods (4%), goods under merchanting (4%), and services (4%).
  • Goods and services credits rose by A$358m (1%) to A$27.984m.
    • Consumption goods imports increased A$549m (7%), with intermediate and other merchanting goods imports up A$429m (5%).
    • There was a slide in the imports of non-monetary gold A$543m (40%).
    • The imports of capital goods fell A$125m (2%), while services rose A$40m (1%).

Retail sales rose by 2.7% in June, following a 16.9% jump in May. Economists had forecast a 2.4% increase.

According to the ABS,

  • Cafes, restaurants, and takeaway food services saw a 27.9% jump in sales, with clothing, footwear, and personal accessory retailing up by 20.5%.
  • There were falls in department store sales (-12.1%) and household goods retailing (-3.2%), however.
  • Online sales accounted for 9.7% of total retail sales in June, up from 6.1% in June 2019.
  • Quarterly volumes declined by 3.4% in the 2nd quarter, however, reversing a 0.7% rise in the 1st

The Aussie Dollar moved from $0.7118 to $0.71164 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.08% to $0.7118.

Elsewhere

At the time of writing, the Kiwi Dollar was flat at $0.6613.

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The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction.

The lack of stats will leave the EUR in the hands of the U.S COVID-19 stimulus package and market risk sentiment on the day.

At the time of writing, the EUR was down by 0.06% to $1.1755.

For the Pound

It’s also a quiet day ahead on the economic calendar, with no material stats due out of the UK to provide direction.

The lack of stats leaves the Pound in the hands of Brexit chatter and COVID-19 news. Any wider containment measures will weigh on the Pound.

At the time of writing, the Pound was down by 0.02% to $1.3072.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar. June’s factory orders are due out later in the day.

While we will expect the numbers to influence, COVID-19 and geopolitics will remain the key drivers.

We may also see the markets begin to take a bigger interest in the Presidential Election campaigns, particularly if Trump hits Twitter.

At the time of writing, the Dollar Spot Index was up by 0.04% to 93.579.

For the Loonie

It’s a quiet day ahead on the economic calendar, with no material stats due out to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk sentiment on the day. PMI numbers from China, the Eurozone, and the U.S had all supported a more optimistic outlook on Monday.

At the time of writing, the Loonie was flat at C$1.3391 against the U.S Dollar.

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

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