Currency markets review, July 25

08:30 UK GDP (q/q) (Q2)     0.6     0.6     0.3        
08:30 UK GDP (y/y) (Q2)     1.4     1.4     0.3        
08:00 DE IFO - Business Congidence (July)     106.2     106.1     105.9

12:30 GMT USA Durable Goods Orders (Jun) 4.2%    0.5%    5.2%       

12:30 GMT USA Durable Goods Orders ex Transportation    0.0%    0.5%    1.0%   

12:30 GMT USA Initial Jobless Claims (Jul 19) 343K    340K    336K       

12:30 GMT USA Continuing Jobless Claims (Jul 13)    2.997M     2.980M    3.116M

 

The dollar slipped against Europe’s shared currency even after orders for U.S. durable goods rose more than forecast in June.

 

The Commerce Department has informed that orders for US long-lasting goods have increased 4.2% MoM during June, crushing expectations at +0.5%, albeit down from 5.2% (revised) in May.

 

According to the Labour Department, the Americans that filed in their first initial claims for regular state unemployment-insurance benefits rose by 7K last week to a seasonally adjusted 343K in the week ended July 19, above expectations at 340K and coming from 336K (revised) in the previous print.

 

EURO:

The common currency rose toward the highest level in five weeks versus the dollar after an industry report showed German business confidence jumped for a third month. But later investors fixed the profit from longs and euro fell sharply.

 

German business confidence rose for a third month in July. The Ifo institute’s business climate index, based on a survey of 7,000 executives, rose to 106.2 in July from 105.9 in June. Economists predicted an increase to 106.1.

 

EUR/USD holds a bit above $1.3200, with support comes at $1.3180 (channel line from Jul 15).  Above $1.3200 gains will extend to $1.3255 (high Jun 21) and $1.3300 (Jun 6 high). Below $1.3180 initial support is around $1.3140 and  $1.3070/60 (Jul 18 lows).

 

POUND:

Sterling fell for a third day versus the euro after data showing U.K. economic growth matched analysts’ estimates damped speculation the Bank of England is moving closer to ending its accommodative policy. British gross domestic product grew 0.6% in the second quarter, the data showed.

 

GBP/USD erased 61.8% of today’s losses. Resistance remains at $1.5390/00 (Jul 22-23 highs and 61.8% Fibo of the $1.5750 - $1.4810 decline). Initial support remains at daily lows on $1.5260, then - at $1.5180 (Tuesday’s lows) with a break lower widens losses to $1.5150 (Jul 18 lows) and $1.5080 (Jul 17 lows).

 

YEN:

The yen climbed as demand for refuge increased. The Japanese currency strengthened for the first time in three days against the euro.

 

The yen has depreciated 3.3% in the past month.

 

USD/JPY holds at Y99.60, sitting on the channel support line from Jun 13 with a break under widens losses to Y98.20 (Jul 11 lows). Back above Y100.00 targets Y100.50 (Jul 15 highs), then - at Y101.00 and Y101.50 (Jul 7 highs).

 

DATA AHEAD:

Friday starts at 06:00 GMT with German Jun Import Price Index, followed by French Jul Consumer Confidence at 06:45 GMT.

At 13:55 GMT Jul Reuters/Michigan Consumer Sentiment Index is due to come.

 

 

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