ASIA session review: Yen slips ahead of BOJ; Aussie, euro also ease

Data released (actual, consensus, previous):                

05:00 GMT Japan Consumer Confidence Index (May)  45.7    44.8    44.5        

05:45 GMT Switzerland Unemployment Rate s.a (MoM) (May) 3.2%    3.2%    3.1%        

06:00 GMT Japan Eco Watchers Survey: Current (May)  55.7   _     56.5        

06:00 GMT Japan Eco Watchers Survey: Outlook (May)  56.2   _     57.8        

07:15 GMT Switzerland Real Retail Sales (YoY) (Apr)  3.3%    2.4%    -0.8%       

08:30 GMT EMU Sentix Investor Confidence (Jun)  -11.6    -10.0    -15.6   

The Japanese yen slipped Monday, a day ahead of a central-bank decision, while lackluster Chinese economic data pushed the Australian dollar lower as well.

“While the euro has benefited from Draghi's post-meeting press conference, confidence may be undermined again if this month's EU leaders' summit and next month's Eurozone finance ministers' meeting are unable to keep banking union on track. That should make euro bulls be careful of expecting further strong rises in the near term from current levels around $1.32 against the dollar”, suggested Mansoor Mohi-uddin, Head of FX Strategy at UBS.

EURO:

Data out the EMU showed Eurozone Sentix Investor Confidence rose to -11.6 in June, from -15.6 in May. Analysts expected slightly more increase to -10.

EUR/USD holds around $1.3200 and now losses may widen to $1.3108 (MA100d) ahead of $1.3075 (low Jun 6) and then $1.3053 (low Jun.5).     Initial resistance comes at $1.3230 (Asian highs), then - at $1.3300, tested Thursday.  A breakout of $1.3319 (high Feb.25) would open the door to $1.3343 (61.8% of Feb-Apr slide).  

POUND:

The pound weakened against the dollar after rising the most in more than three years last week.

Sterling has appreciated 5.2% in the past three months, while the dollar gained 0.9% and the euro rose 2.4%.

GBP/USD consolidates within the 50-points range with initial resistance comes at Asia highs on $1.5560/70, stronger - at Thursday’s high on $1.5680, extending to $1.5700. Break under $1.5500 targets $1.5420 (38.2% Fibo of the $1.5000 - $1.5680 rise) and $1.5370 (Jun 3 high).

YEN:

The yen’s losses came as the Bank of Japan kicked off its two-day meeting in Tokyo, with investors waiting to see whether the central bank would offer any further easing moves after standing pat at its previous gathering in late May.

Japan posted a larger-than-expected current-account surplus of ¥750 billion ($735 billion) for April, compared with expectations for a ¥310 billion surplus. Separately, Japan revised its growth data for the January-to-March period to 4.1% in annualized terms, higher than the 3.5% growth initially reported.

USD/JPY recovered more then 300 points from Friday’s lows near Y95.00. Currently the rate challenge 38.2% Fibo of the Y103.80 - Y95.00 decline) with a break above targets Y99.35/40 (50%) and Y100.40 (61.8% and Jun 4 highs). Initial support is near Y97.70 (Asian lows). Below dollar may retreat to Y95.50 (Thursday’s lows) and Y95.00/95 (Friday’s lows).

COMMODITY CURRENCIES

AUSSIE: Australia’s currency also lost ground after China released a slate of data over the weekend showing a mild slowdown in growth and a much softer gain in exports than had been forecast.

China is a major buyer of Australian exports, making the Aussie especially sensitive to the Chinese economic outlook.

A 1.0% increase in exports for May, combined with a 0.3% decline in imports, painted a poor picture for trade. Industrial production grew slightly slower in May compared to April, while consumer prices rose by 2.1%, undershooting expectations.

DATA AHEAD:

UK RICS Housing Price Balance (May) will end the day’s data at 23:01GMT.

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