US review: Pound rose after Carney’s speech

Data released: 

06:00 GMT Germany Wholesale Price Index (MoM) (Aug) -0.6% _ -0.3% 

06:00 GMT Germany Wholesale Price Index (YoY) (Aug) -1.7% _ 0.0% 

08:00 GMT EMU ECB Monthly Report 

09:00 GMT EMU Industrial Production w.d.a. (YoY) (Jul) -2.1% -0.1% -0.4% 

09:00 GMT EMU Industrial Production s.a. (MoM) (Jul) -1.5% 0.1% 0.6%

The yen strengthened for a second day against the dollar after Japan’s machinery orders stagnated in July and amid concern a sales-tax increase will hamper economic growth, boosting demand for the currency as a haven.

The euro fluctuated against the U.S. currency after weakening on a report that showed industrial output in the 17-nation region contracted in July. 

Analysts said with the threat of an immediate U.S. attack on Syria waning, the focus was on next week's Federal Reserve meeting. At the meeting the Fed is expected to kick start its stimulus withdrawal programme, but given that the U.S. jobs market is still not picking up pace it may sound a dovish note.

EURO

Data released showed year-over-year Eurozone Industrial Production w.d.a. declined by 2.1% in July, down from the 0.4% decrease registered the previous month. Analysts expected much less fall of 0.1%. On a monthly basis Industrial Production s.a. fell 1.5% in July, following a 0.6% increase in June and against forecasts of growing 0.1%.

EUR/USD stays in narrow range. Strong resistance remains at $1.3400 (Aug 23 highs) with a break above targets $1.3450 (Aug 20 high). Initial support comes at $1.3220 (Sep 5 highs) and $1.3100 (Sep 6 lows). Below $1.3100 rate may test $1.3060 (Jul 18 lows) and $1.3000 (Jul 15 lows).

POUND

Governor of the Bank of England Mark Carney noted that current pace of UK economy recovery is far from its potential. He called to be vigilant on housing market and said that market has had more positive outlook on jobless market than hisself. Also he noted he doesn’t afraide to raise interest rates. This Carney’s speech was much more hawkish then usually.

GBP/USD holds a bit below yesterday’s highs on $1.5830. Above $1.5830 (also Nov 15 lows) resistance comes at $1.5880 (Jan 31 high). If rate breaks under $1.5780, losses may widen to $1.5640 (channel line from Aug 30), extending to Aug 30 lows on $1.5460.

YEN

The yen strengthened for a second day against the dollar after Japan’s machinery orders stagnated in July and amid concern a sales-tax increase will hamper growth.

Japanese machinery orders were unchanged in July from the previous month when they fell 2.7%, the Cabinet Office said. Economists predicted an increase of 2.4%.

USD/JPY continues to drop. Minor support comes Y98.00/Y97.90 (Aug 30 lows). Above Y100.40 resistance is at Y100.80/85 (Jul 2 and 18 highs) and Y101.30 (channel line from Aug 27). 

COMMODITY CURRENCY:

Australia’s currency weakened against all its major counterparts after a government report showed employers unexpectedly cut payrolls for a second month. 

The New Zealand dollar advanced as the central bank signaled it may raise interest rates next year from a record low.

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