USDThe US dollar started the week on a strong note, despite the Federal budget balance release which confirmed that the government surplus of more than 100 billion USD has turned into a deficit of nearly 100 billion USD. There were no other reports released from the US yesterday, as traders gear up for the release of US retail sales figures today. Stronger increases are eyed for July, although the possibility of a downside surprise is on the table since the July jobs figures missed expectations.
The euro came under selling pressure again yesterday as news that Greece would need another round of bailout funds hit the airwaves. With that, traders seemed to ignore the better than expected GDP reading of Greece, which showed that the nation contracted by only 4.6% for the second quarter instead of the estimated 4.9% drop in growth. For today, German ZEW figures are on tap and it is likely it that it will show an improvement from 36.3 to 40.3 in August. Euro zone industrial production data and ZEW economic expectations figures are also due today.
The pound was no match to dollar strength on Monday, as GBP/USD broke below the 1.5500 major psychological level and dipped to 1.5450. There were no economic reports released from the UK yesterday and today has the CPI figures on tap. The CPI is expected to be at 2.8%, a notch lower than the previous 2.9% reading. However, stronger than expected readings might be positive for the pound as it could convince the BOE to scale back on its stimulus efforts.
The Swiss retail sales figure beat expectations of a 1.9% increase and came in at 2.3%. This was also better than the previous reading of 1.8%. However, the franc still gave way to dollar strength in yesterday’s trading as USD/CHF pulled up a few pips close to the .9300 handle. There are no reports from Switzerland today so watch out for the US retail sales release if you’re trading USD/CHF.
The yen was outpaced by most of its counterparts in yesterday’s trading as Japan’s GDP report printed a weaker than expected reading of 0.6% instead of the estimated 0.9% growth. Earlier today, core machinery orders showed a smaller than expected decrease of 2.7% compared to the estimate of a 7.1% decline. No other reports are due from Japan today so yen pairs might be affected by fundamentals or risk sentiment mostly.
Commodity Currencies (AUD, NZD, CAD)
There were no major releases from the comdolls in yesterday’s trading, although some retreated from their recent rallies. AUD/USD was unable to make any headway past the .9200 handle as it dropped back down to the .9100 area while USDCAD held steady around 1.0300. There are no major releases from Australia and Canada but New Zealand is set to print its quarterly retail sales figures in the next Asian session.
By Kate Curtis from Trader’s Way.