Trade War Chatter and the UK Leadership Race Put the USD and GBP in Focus

The Greenback is on the back foot early as the Asian markets respond to softer inflation out of the U.S. Australian employment figures failed to impress this morning.
Bob Mason
Forex Markets Currency Trading Concept.

Earlier in the Day:

Economic data was on the lighter side through the Asian session this morning. Japan large manufacturing conditions numbers and Australian employment figures provided direction early on.

For the Japanese Yen,

The BSI Large Manufacturing Conditions Index came in at -10.4. Forecasts were for the Index to recover from -7.3 to 4.5 for the 2nd quarter.

The Japanese Yen moved from ¥108.484 to ¥108.513 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.07% to ¥108.42 against the U.S Dollar.

For the Aussie Dollar,

May employment figures provided the Aussie Dollar with the direction in the early hours. According to figures released by the ABS,

  • Employment increased by 42,300 persons in May.
  • There was a net increase of 2,400 persons in full-time employment, while there was a 39,800 increase in part-time employment.
  • Year-on-year, full-time employment increased by 266,300 persons, while part-time employment increased by 93,900 persons.
  • The unemployment rate held steady at 5.2%, which was worse than a forecasted 5.1%.
  • Seasonally adjusted, the participation rate increased by 0.1% to 66.0%.

The Aussie Dollar moved from $0.69273 to $0.69236 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.04% to $0.6925.

Elsewhere,

At the time of writing, the Kiwi Dollar was up by 0.11% to $0.6581.

The Day Ahead:

For the EUR,

It’s a relatively quiet day ahead for the EUR.

German finalized May inflation figures are due out along with the Eurozone’s May industrial production numbers.

While the inflation figures will likely have a muted impact, we can expect the industrial production figures to have an impact. Forecasts are EUR negative.

Outside of the numbers, we can expect further fallout from the U.S inflation figures from Wednesday.

Geopolitics and trade war chatter will also influence on the day.

At the time of writing, the EUR was up by 0.06% to $1.1294.

For the Pound,

It’s a quiet day ahead.

With no material stats due out later this morning, the focus will be on today’s 1st leadership race ballot.

Barring a shock exit of one of the front runners in the leadership race, the Pound will likely be immune to the result. Of greater significance will be chatter from those who go into next week and sentiment towards Brexit.

At the time of writing, the Pound was up by 0.06% to $1.2696.

Across the Pond,

U.S import and export price index figures are due out later this afternoon. Barring material deviation from the forecast, the markets will likely brush aside the numbers.

We will expect greater interest in the import price index, however, as the markets look for further signs of softer inflation.

As always, chatter from the Oval office will also need to be considered through the day.

At the time of writing, the Dollar Spot Index was down by 0.03% to 96.972.

For the Loonie,

New house price figures are unlikely to have an impact on the Loonie through the day.

OPEC’s monthly report and sentiment towards the global economy will influence. OPEC will need to demonstrate a willingness to cut supply for oil prices to bottom out.

The Loonie was up 0.10% to C$1.3330, against the U.S Dollar, at the time of writing.

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