ASIA session review: Dollar goes higher

Data released (actual, consensus, previous):                           

00:00 GMT Australia CB Leading Indicator (May)  0.0%   _     0.3%        

01:30 GMT Australia National Australia Bank's Business Confidence (QoQ) (Q2)   -1  _      2             

01:30 GMT China House Price Index (Jun)  6.8% _       6.0%        

06:00 GMT Switzerland Trade Balance (Jun) 2,732M    2,410M    2,123M    

06:00 GMT Switzerland Exports (MoM) (Jun)   16,707.000M   _     17.434B        

06:00 GMT Switzerland Imports (MoM) (Jun)  13,975.00M   _     15.21B        

08:00 GMT EMU Current Account s.a (May) €19.6B    €20.0B    €23.8B    

08:00 GMT EMU Current Account n.s.a (May) €9.5B    €13.0B    €16.6B    

08:30 GMT UK Retail Sales (YoY) (Jun) 2.2%    1.7%    2.1%       

08:30 GMT UK Retail Sales (MoM) (Jun) 0.2%    0.2%    2.1%        

08:30 GMT UK Retail Sales ex-Fuel (MoM) (Jun)  0.2%    0.2%    2.1%        

08:30 GMT UK Retail Sales ex-Fuel (YoY) (Jun)   2.1%    1.6%    2.3%

The dollar rose against all its major peers before data today economists say will signal improvement in the U.S. job market. 

First-time claims for jobless benefits probably decreased by 15,000 to 345,000 in the week ended July 13, according to the median estimate of economists before the Labor Department data today.

The dollar gained yesterday as traders reassessed Federal Reserve Chairman Ben S. Bernanke’s statement to Congress.

Federal Reserve Chairman Ben S. Bernanke stressed that the decision on when the tapering should begin depends on the Fed's assessment of the US economic outlook. Should economic data improve earlier than forecasted and inflation rise towards the objective, a reduction could be carried out sooner. Otherwise, “the current pace of purchases could be maintained for longer.”

EURO:

The euro advanced toward a six-week high versus the yen after Greek lawmakers approved austerity measures that clear the way for the next batch of bailout loans.

In Europe, Greek lawmakers passed a bill that puts thousands of state workers on notice for possible dismissal, a victory for Prime Minister Antonis Samaras that clears the way for the country’s next bailout installment. The vote came hours before German Finance Minister Wolfgang Schaeuble arrives in Athens for a one-day visit.

“Greece’s passage of the austerity bill may halt a decline in the euro in the near term,” said Kengo Suzuki, the chief currency strategist at Mizuho Securities Co..

EUR/USD consolidates near $1.3100 with next support comes at $1.2966 (low Jul.11) ahead of $1.2949 (high Jul.10) and finally $1.2755 (low Jul.1). Initial resistance comes at daily highs on $1.3180 with a  break above $1.3208 (high Jul 11) would expose $1.3255 (high Jun 21).

POUND:

Positive results from UK retailers during June boosted the sterling. National Statistics informed on Thursday that year-over-year UK Retail Sales increased 2.2% in June, compared with the 2.1% rise in May and above forecasts of +1.7%.

On a monthly basis UK Retail Sales rose 0.2% in June, after growing 2.1% in May, as projected.

Annual Retail Sales excluding Fuel increased 2.1%, down from the 2.3% rise but above market consensus of 1.6% growth. Month-over-month Retail Sales excluding Fuel edged up 0.2%, following a 2.1% increase, as expected.

GBP/USD remains under pressure after it broke $1.5200. Initial support comes at $1.5080 (Jul 17 lows), below - at $1.5030 (Jul 15 lows) and $1.4780 (Feb 28’2010 lows). Minor resistance comes at yesterday’s high on $1.5265, printed following the BOE minutes. Further resistance is around $1.5300.

YEN:

The yen weakened for a second day on bets Group of 20 finance ministers and central bankers meeting this week will endorse the Bank of Japan’s monetary easing that aims to stoke 2% inflation.

Russian Deputy Finance Minister Sergei Storchak said the G-20 probably won’t call for a tapering of stimulus in nations including Japan.

“We see the yen weakening further,” said Kengo Suzuki, the chief currency strategist at Mizuho Securities Co.

The BOJ doubled monthly bond purchases to more than 7 trillion yen ($70 billion) in April, after Prime Minister Shinzo Abe urged the central bank to take steps to overcome deflation. Polls have shown Abe’s Liberal Democratic Party and coalition partners are likely to win a majority in the upper house election this weekend, ending a split parliament.

USD/JPY holds above Y100.00. Initial resistance comes at Y100.50 (Jul 15 highs), then - at Y101.00 and Y101.50 (Jul 7 highs). Support is around channel line from Jun 13 at Y99.30, below support comes at Y98.20 (Jul 11 lows).

DATA AHEAD:

At 14:00 GMT US  CB Leading Indicator is due (0.2% vs  0.1%) as well as   Philadelphia Fed Manufacturing Survey ( 8.0    12.5).

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