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Dollar and Yen Rise on Global Slowdown Fears, Euro Eyes PMI Data

By , Currency Strategist
05 September 2012 06:51 GMT

Talking Points

  • Dollar, Yen Rise on Disappointing Australian and Chinese Economic Data
  • Eurozone PMI Revisions May Raise the Stakes for ECB Policy Announcement

The US Dollar and Japanese Yen rose overnight as stocks declined, boosting demand for the go-to haven currencies. The MSCI Asia Pacific regional benchmark equity index fell 1 percent amid global slowdown fears in the wake of disappointing economic data. Australian GDP figures showed output grew 0.6 percent in the second quarter, missing expectations of a 0.7 percent increase. Separately, the AiG Performance of Services gauge showed the non-manufacturing sector contracted at the fastest pace in four months. Meanwhile, the analogous HSBC Services PMI fell to the lowest level in a year.

Final revisions of Augusts’ Eurozone Services PMIs headline the European economic calendar. Key Manufacturing PMI readings were revised lower in the week. More of the same on the service-sector components may point to a deeper slowdown in regional activity, reinforcing hopes for additional stimulus to emerge at Thursday’s ECB rate decision. As we discussed in our weekly forecast, a policy announcement that focuses exclusively on outlining operational details of the central bank’s new bond-buying scheme without offering anything on the growth front may weigh on the Euro and risky assets in general.

Asia Session: What Happened

GMT

CCY

EVENT

ACT

EXP

PREV

22:45

NZD

Value of All Buildings s.a. (2Q)

0.8%

3.0%

-0.4%

23:01

GBP

BRC Shop Price Index (YoY) (AUG)

1.1%

-

1.0%

23:30

AUD

AiG Performance of Service Index (AUG)

42.4

-

46.5

1:30

AUD

GDP (QoQ) (2Q)

0.6%

0.7%

1.4% (R+)

1:30

AUD

GDP (YoY) (2Q)

3.7%

3.7%

4.4% (R+)

2:30

CNY

HSBC Services PMI (AUG)

52.0

-

53.1

Euro Session: What to Expect

GMT

CCY

EVENT

EXP

PREV

IMPACT

7:15

CHF

CPI (MoM) (AUG)

0.1%

-0.5%

Medium

7:15

CHF

CPI (YoY) (AUG)

-0.4%

-0.7%

Medium

7:15

CHF

CPI - EU Harmonised (MoM) (AUG)

-

-0.3%

Low

7:15

CHF

CPI - EU Harmonised (YoY) (AUG)

-

-0.8%

Low

7:45

EUR

Italian PMI Services (AUG)

43.3

43.0

Low

7:50

EUR

French PMI Services (AUG F)

50.2

50.2

Low

7:55

EUR

German PMI Services (AUG F)

48.3

48.3

Medium

8:00

EUR

Euro-Zone PMI Services (AUG F)

47.5

47.5

Medium

8:00

EUR

Euro-Zone PMI Composite (AUG F)

46.6

46.6

Medium

8:30

GBP

Official Reserves (Changes) (AUG)

-

$528M

Low

9:00

EUR

Euro-Zone Retail Sales (MoM) (JUL)

-0.2%

0.2%

Medium

9:00

EUR

Euro-Zone Retail Sales (YoY) (JUL)

-1.7%

-1.0%

Medium

Critical Levels

CCY

SUPPORT

RESISTANCE

EURUSD

1.2437

1.2611

GBPUSD

1.5829

1.5900

--- 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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05 September 2012 06:51 GMT