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Dollar, Yen Aim to Extend Gains as China Exports Data Sinks Sentiment

By , Currency Strategist
10 August 2012 05:45 GMT

Talking Points

  • Dollar, Yen Rise on Haven Flows as Chinese Export Data Misses Forecasts
  • German CPI Revision, UK PPI Report Unlikely to Spark Strong Reaction
  • S&P 500 Index Futures Sink, Hinting Risk Aversion is Likely to Continue

The US Dollar and Japanese Yen pushed higher overnight, rising against all of their major counterparts as Asian stocks declined, boosting demand for the go-to haven currencies. The MSCI Asia Pacific regional equity benchmark index fell 0.9 percent amid economic slowdown fears after Chinese export growth slowed to the weakest in six months. Overseas sales added 1 percent in the year to July, falling short of economists’ expectations for an 8 percent increase. New Loans dropped to CNY540.1 billion over the same period, marking the lowest reading since September 2011 and underscoring the deepening downturn in the world’s second-largest economy.

The economic calendar is relatively quiet in European hours, with the final revision of July’s German CPI figures and the UK PPI report highlighting a docket of second-tier releases. Both outcomes are unlikely to generate a strong reaction from price action given their limited capacity to reshape established ECB and BOE policy expectations. Markets are pre-occupied with new “non-standard” Eurozone debt crisis-fighting measures in the case of the former and have learned most of everything they needed to know in the quarterly inflation report where it concerns the latter. S&P 500 stock index futures are pointing firmly lower, hinting the risk-averse mood is likely to carry forward through the end of the trading week.

Asia Session: What Happened

GMT

CCY

EVENT

ACT

EXP

PREV

22:45

NZD

NZ Card Spending - Retail (MoM) (JUL)

-0.6%

0.3%

0.4% (R-)

22:45

NZD

NZ Card Spending (MoM) (JUL)

-0.8%

-

0.1% (R-)

23:50

JPY

Domestic CGPI (MoM) (JUL)

-0.4%

0.1%

-0.7% (R-)

23:50

JPY

Domestic CGPI (YoY) (JUL)

-2.1%

-1.5%

-1.4%

1:30

AUD

RBA Statement on Monetary Policy

-

-

-

3:00

CNY

Trade Balance ($) (JUL)

25.10B

35.05B

31.72B

3:00

CNY

Exports (YoY) (JUL)

1.0%

8.0%

11.3%

3:00

CNY

Imports (YoY) (JUL)

4.7%

7.0%

6.3%

4:30

JPY

Industrial Production (MoM) (JUN F)

0.4%

-

-0.1%

4:30

JPY

Industrial Production (YoY) (JUN F)

-1.5%

-

-2.0%

4:30

JPY

Capacity Utilization (MoM) (JUN F)

-2.3%

-

-2.2%

5:00

JPY

BOJ Monthly Economic Report

-

-

-

5:00

CNY

New Yuan Loans (JUL)

540.1B

700.0B

919.8B

5:00

CNY

Money Supply – M0 (JUL)

10.0%

-

10.8%

5:00

CNY

Money Supply – M1 (JUL)

4.6%

5.3%

4.7%

5:00

CNY

Money Supply – M2 (JUL)

13.9%

13.8%

13.6%

Euro Session: What to Expect

GMT

CCY

EVENT

EXP

PREV

IMPACT

6:00

EUR

German Consumer Price Index (MoM)

0.4%

0.4%

Medium

6:00

EUR

German Consumer Price Index (YoY)

1.7%

1.7%

Medium

6:00

EUR

German CPI - EU Harmonised (MoM)

0.4%

0.4%

Medium

6:00

EUR

German CPI - EU Harmonised (YoY)

2.0%

2.0%

Medium

6:45

EUR

French Industrial Production (MoM)

0.1%

-1.9%

Low

6:45

EUR

French Industrial Production (YoY)

-1.8%

-3.5%

Low

6:45

EUR

French Manufacturing Production (MoM)

0.0%

-1.0%

Low

6:45

EUR

French Manufacturing Production (YoY)

-2.1%

-4.3%

Low

6:45

EUR

French Central Government Balance (€)

-62.9B

-69.9B

Low

8:00

EUR

Italian CPI (NIC incl. tobacco) (MoM)

0.0%

0.0%

Low

8:00

EUR

Italian CPI (NIC incl. tobacco) (YoY)

3.0%

3.0%

Low

8:00

EUR

Italian CPI - EU Harmonized (MoM)

-1.6%

-1.6%

Low

8:00

EUR

Italian CPI - EU Harmonized (YoY)

3.7%

3.7%

Low

8:30

GBP

PPI Input n.s.a. (MoM)

1.3%

-2.2%

Low

8:30

GBP

PPI Input n.s.a. (YoY)

-1.5%

-2.3%

Low

8:30

GBP

PPI Output n.s.a. (MoM)

0.0%

-0.4%

Medium

8:30

GBP

PPI Output n.s.a. (YoY)

2.0%

2.3%

Medium

8:30

GBP

PPI Output Core n.s.a. (MoM)

0.1%

-0.2%

Low

8:30

GBP

PPI Output Core n.s.a. (YoY)

1.6%

2.0%

Low

Critical Levels

CCY

SUPPORT

RESISTANCE

EURUSD

1.2200

1.2373

GBPUSD

1.5483

1.5681

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

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10 August 2012 05:45 GMT