ASIA session review: Dollar set for weekly drop

Data released (actual, consensus, previous):

01:30 GMT China Consumer Price Index (MoM) (Jul)   0.1%    0.1%    0.0%        

01:30 GMT China Consumer Price Index (YoY) (Jul)  2.7%    2.8%    2.7%        

01:30 GMT China Producer Price Index (YoY) (Jul)   -2.3%    -2.2%    -2.7%        

01:30 GMT Australia RBA Monetary Policy Statement                      

05:00 GMT Japan  Bank of Japan Monthly Economic Survey                     

05:00 GMT Japan Consumer Confidence Index (Jul)  43.6    45.0    44.3        

05:30 GMT China Industrial Production (YoY) (Jul)   9.7%    9.0%    8.9%        

05:30 GMT China Retail Sales (YoY) (Jul)  13.2%    13.5%    13.3%        

08:30 GMT UK Total Trade Balance (Jun)  £-1.548B    £-2.350B    £-2.612B    

08:30 GMT UK Goods Trade Balance (Jun)  £-8.082B    £-8.500B    £-8.668B    

08:30 GMT UK Trade Balance; non-EU (Jun)   £-2.646B    £-3.800B    £-4.019B    

09:00 GMT UK  CB Leading Economic Index (Jul) -0.2%   _     0.4%

The dollar headed for a weekly decline against all its major counterparts following strong reports on the economies of China, Europe and the U.K.

China’s industrial production rose 9.7% in July from a year ago, after expanding 8.9% the previous month. Also official data showed July consumer prices in China rose 2.7%, matching the rate in June but slightly weaker than expectations. Producer prices dropped 2.3%, after witnessing a 2.7% slide in June.

EURO:

The euro holds within the narrow range.

Euro-area’s gross domestic product expanded 0.2% in the second quarter, after contracting for the previous six quarters, according to the median estimate before the report is released on Aug. 14.

EUR/USD retreats after it failed to break above $1.3400. Minor support comes at yesterday’s lows on $1.3325, below - at $1.3250  (channel line). Above $1.3400 targets $1.3430 (channel line from Jul 15) and $1.3520 (Feb 13 highs).

POUND:

The pound has edged higher following better than expected UK trade data.

UK Trade Balance data has beaten expectations across the board. The Total Trade Balance came in at GBP-1.54B/GBP-2.35B, The Goods Trade Balance GBP-8.082B/GBP-8.5B and The Trade Balance - non EU GBP-2.64B/GBP-3.8B.

GBP/USD consolidates a bit lowe yesterday’s highs at $1.5570 region. Further resistance comes at $1.5600 (May highs and channel line from Jul 9). Initial support comes at $1.5480 (Jul 8 lows). Below bears may drag the rate down to $1.5400/90 (recent lows) and $1.5300.

YEN:

The yen corrects vs the dollar.

USD/JPY recovered from yesterday’s lows on Y95.80 (initial support) and remains under pressure. Below losses may widen to Y95.20 (Jun 7 lows) and Y93.80 (Jun 13 lows). Initial resistance comes at daily highs on Y96.80, above - at Y97.60 (Jul 31 lows) and Y98.80.

DATA AHEAD:

At 12:30 GMT Canada will present jobs data.

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