Currency markets review, July30

Data released (actual, consensus, previous):                       

06:00 GMT Germany Gfk Consumer Confidence Survey (Aug)  7.0    6.9    6.8   

09:00 GMT EMU Consumer Confidence (Jul) -17.4    -17.4    -18.8        

09:00 GMT EMU Business Climate (Jul)  -0.53    -0.55    -0.67       

09:00 GMT EMU Economic Sentiment Indicator (Jul)  92.5    92.6    91.3        

09:00 GMT EMU Services Sentiment (Jul) -7.8    -9.0    -9.5        

09:00 GMT EMU Industrial Confidence (Jul)  -10.6  -10.3    -11.2

 

The USD gained across the board as stocks fell as buyers have tempered their enthusiasm in front of the Q2 GDP report tomorrow and the latest directive from the Federal Open Market Committee.

 

The pound weakened for a sixth day against the euro amid bets the Bank of England, which meets this week, is more likely to say it favors additional stimulus than either the European Central Bank or Federal Reserve.

 

EURO:

The measure of consumer confidence in Germany in terms of the Gfk Survey up ticked to 7.0 for the month of August, slightly above expectations at 6.9.

 

EUR/USD consolidates under $1.3300, with closest support coming  at $1.3255 (high Jun 21).  Below $1.3160 initial support is around $1.3140 and  $1.3070/60 (Jul 18 lows). Above $1.3300 (Jun 6 high) gains will extend to and $1.3325.

 

POUND:

The U.K. currency fell the most in three weeks versus the dollar before Britain’s policy makers release their quarterly Inflation Report next week, which will include findings on interest-rate guidance. The ECB and Fed also meet this week. Sterling is headed for a fourth monthly loss versus the euro. U.K. government bonds were little changed.

 

GBP/USD is sliding and trades close to support at 1.5240 - 1.5260 area. On the flip side, a break above 1.5350 would expose 1.5420.

 

YEN:

The yen fell from the strongest level in two weeks versus the euro after Japan’s industrial production slid by the most in two years.

 

USD/JPY remains above Y97.65/50 (50% Fibo from Y93.80 - Y101.50, also the lower bound of the channel from Jul 7 and session lows). If break under support comes at Y96.75 (61.8%). Initial resistance is near session highs at Y98.50, above - at Y98.80/90 (ex-support). Further resistance is around Y100.47 (Thursday’s high).

 

COMMODITY CURRENCIES:

Australia’s dollar approached the weakest level in three years versus its U.S. counterpart after the central bank governor said there’s still room to cut interest rates and the currency may depreciate further.

 

DATA AHEAD:

Wednesday’s calendar starts at 05:00 GMT with Japan Construction Orders and Housing Starts for June.

At 06:00 GMT Swiss UBS Consumption Indicator for Junt comes, followed by Jul KOF Leading Indicator at 07:00 GMT.

At 07:55 GMT Germany reports Jul Unemployment Rate with 6.8% expected, and Unemployment Change with -4K expected after -12K in June.

At 09:00 GMT EMU releases its preliminary CPI data for July along with Jun Unemployment Rate with 12.1% expected after 12.2% earlier.

At 12:15 GMT attention turns to Jul ADP Employment Change. Meaidna estimate is for 182K after 188K in June. At 12:30 GMT Canada and US release flash Q2 GDP numbers.

At 13:45 GMT US Chicago Purchasing Managers' Index for July comes with 54.0 expected after 51.6 earlier.

At 14:30 GMT EIA Crude Oil Stocks change for the Jul 26 week is due to come.

Later, at 18:00 GMT, Fed Interest Rate Decision will be the main focus with Fed's Monetary Policy Statement and press conference is set to follow.

At 23:30 GMT Australia reports Jul AiG Performance of Mfg Index.

 

 

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