Talking Points
- Japanese Yen: Rallies Across The Board For Second Day
- Pound: Mortgage Approvals Unexpectedly Push Higher in July
- Euro: Unemployment Holds at 12-Year High
- U.S. Dollar: Consumer Confidence, FOMC Minutes on Tap
Meanwhile, Standard & Poor’s said the austerity measures in the Euro-Zone is likely to “weigh on domestic demands” as governments operating under the fixed-exchange rate system withdraw fiscal stimulus and target the budget deficit, but went onto say that the risks for a double-dip recession “appears more remote” as the group expects to see a gradual recovery going forward.
At the same time, European Central Bank board member Erkki Liikanen said cutting the budget deficit remains a challenge for many countries and argued for increased supervision of the financial markets in an effort to counter the risks for large imbalances during an interview with a Finnish newspaper, and the central bank is widely expected to maintain the expansion in monetary policy later this week as the region struggles to manage its public finances. Nevertheless, the economic docket showed unemployment in Germany slipped 17K in August amid forecasts for a 20K decline, while the jobless rate was unchanged at 7.6% after falling back from 7.7% in June. Moreover, the annual rate of unemployment in the Euro-Zone held steady at the 12-year high of 10.0% for the fifth month in July, while the inflation estimate fell back to 1.6% in August from 1.7% is the previous month, which was largely in-line with expectations. As policy makers expect to see an “uneven” recovery paired with subdued price growth, the ECB is likely to support the economy throughout the remainder of the year, but the central may look to revise its assessment for region as it continues to benefit from the rebound in global trade.
The British Pound extended the decline from the previous day and slipped to a fresh monthly low of 1.5365 after breaking below the 50-Day SMA at 1.5420, and the exchange rate may continue to push lower throughout the day as investors scale back their appetite for risk. As the GBP/USD fails to retrace the decline from the previous week and holds below the 20-Day SMA at 1.5625, the pound-dollar may continue to retrace the advance from June following the shift in market sentiment. Meanwhile, mortgage approvals in the U.K. increased 48.7K in July, from a revised 48.6K, which exceeded expectations for a 46.5K print, with net consumer credit unexpectedly advancing GBP 0.2B during the same period after contracting GBP 0.1B in June.
The greenback advances against most of its currency counterparts, while the USD/JPY slipped to a low of 84.04 during the overnight session as the Japanese Yen rallied across the board, but the slew of event risk scheduled for the U.S. could spark increased volatility in the dollar as investors weigh the outlook for the world’s largest economy. The S&P/Case-Shiller Home price index is expected to increase 0.20% in June after climbing 0.47% in the previous month, while the Conference Board’s gauge for consumer sentiment is forecasted to tip higher in August, with market participants projecting the index to rise to 50.7 from 50.4 in the previous month. However, the biggest market mover of the day will be the Fed’s policy meeting minutes due out at 18:00 GMT and we are likely to hear Chairman Ben Bernanke maintain a dovish outlook for future policy as he maintains his pledge to keep borrowing costs close to zero for an extended period of time, but a shift in the central bank’s economic assessment could weigh on the greenback as policy makers continue to see a substantial amount of slack within the private sector.
Will the EUR/USD Continue To Retrace The Advance From June? Join us in the Forum
Related Articles: Weekly Trading Forecast - 08.30.10
To discuss this report contact David Song, Currency Analyst:dsong@fxcm.com
FX Upcoming
|
Currency |
GMT |
EST |
Release |
Expected |
Prior |
|||||
|
CAD |
12:30 |
08:30 |
GDP (MoM) (JUN) |
0.2% |
0.1% | |||||
|
CAD |
12:30 |
08:30 |
Quarterly GDP Annualised (2Q) |
2.5% |
6.1% | |||||
|
USD |
13:00 |
09:00 |
Case-Shiller Composite-20 (MoM) (JUN) |
0.35% |
0.47% | |||||
|
USD |
13:00 |
09:00 |
Case-Shiller Composite-20 (YoY) (JUN) |
3.50% |
4.61% | |||||
|
USD |
13:00 |
09:00 |
Case Shiller Home Price Index (JUN) |
-- |
164.43 | |||||
|
USD |
13:00 |
09:00 |
Case Shiller Home Price Index (2Q) |
-- |
131.8 | |||||
|
USD |
13:00 |
09:00 |
Case-Shiller Home Price Index (YoY) (2Q) |
-- |
2.0% | |||||
|
USD |
12:45 |
09:45 |
Chicago PMI (AUG) |
57.5 |
62.3 | |||||
|
USD |
14:00 |
10:00 |
Consumer Confidence (AUG) |
51.0 |
50.4 | |||||
|
USD |
14:00 |
10:00 |
NAPM-Milwaukee (AUG) |
-- |
66 | |||||
|
Currency |
GMT |
Release |
Expected |
Actual |
Comments |
|||||
|
NZD |
22:45 |
Building Permits (MoM) (JUL) |
2.0% |
3.1% |
Second straight expansion after contracting sharply in May. |
|||||
|
GBP |
23:00 |
Consumer Confidence Survey (AUG) |
-24 |
-18 |
Rises, to end 5 months of declines |
|||||
|
JPY |
23:15 |
Nomura/JMMA Manufacturing PMI (AUG) |
-- |
50.1 |
Growth in ind production, output and exports begins to moderate after running at a robust pace earlier in the year. |
|||||
|
JPY |
23:50 |
Industrial Production (MoM) (JUL) |
-0.2% |
0.3% |
||||||
|
JPY |
23:50 |
Industrial Production (YoY) (JUL) |
14.3% |
14.8% | ||||||
|
JPY |
23:50 |
Large Retailers Sales (JUL) |
-1.3% |
-1.2% | ||||||
|
JPY |
23:50 |
Loans & Discounts Corp (YoY) (JUL) |
-- |
-4.2% | ||||||
|
JPY |
23:50 |
Retail Trade (YoY) (JUL) |
3.5% |
3.9% | ||||||
|
JPY |
23:50 |
Retail Trade (MoM) (JUL) |
0.5% |
0.7% | ||||||
|
AUD |
01:30 |
Building Approvals (MoM) (JUL) |
-0.7% |
2.3% |
July and Q2 data come in firmer underscoring the Australian economy’s resilience into the beginning of Q3, suggesting rate cuts are still not needed. |
|||||
|
AUD |
01:30 |
Building Approvals (YoY) (JUL) |
6.1% |
11.0% |
||||||
|
AUD |
01:30 |
Current Account Balance (AUD) (2Q) |
-6500M |
-5640M | ||||||
|
AUD |
01:30 |
Net Exports of GDP (2Q) |
0.3 |
0.4 | ||||||
|
AUD |
01:30 |
Private Sector Credit (MoM) (JUL) |
0.3% |
0.1% | ||||||
|
AUD |
01:30 |
Private Sector Credit (YoY) (JUL) |
3.0% |
2.8% | ||||||
|
AUD |
01:30 |
RP Data-Rismark Med Val (MoM) (JUL) |
-- |
0.1 | ||||||
|
AUD |
01:30 |
RP Data-Rismark Med Val s.a. (MoM) (JUL) |
-- |
0.4 | ||||||
|
AUD |
01:30 |
Retail Sales (MoM) (JUL) |
0.4% |
0.7% | ||||||
|
JPY |
01:30 |
Labour Cash Earnings (YoY) (JUL) |
-- |
1.3% |
Notches up a 5th straight expansion. |
|||||
|
JPY |
04:00 |
Vehicle Production (YoY) (JUL) |
-- |
16.8% |
Slowest expansion in 2010 |
|||||
|
JPY |
05:00 |
Annualised Housing Starts (JUL) |
0.756M |
0.772M |
Annualised housing starts show highest gain since Oct 2008 |
|||||
|
JPY |
05:00 |
Construction Orders (YoY) (JUL) |
-- |
-0.7% |
||||||
|
JPY |
05:00 |
Housing Starts (YoY) (JUL) |
2.0% |
4.3% | ||||||
|
JPY |
05:00 |
Small Business Confidence (AUG) |
-- |
48.4 |
Third straight rise |
|||||
|
CHF |
06:00 |
UBS Consumption indicator (JUL) |
-- |
1.860 |
Hits a 2-yr high |
|||||
|
EUR |
07:30 |
Italian Business Confidence (AUG) |
98.5 |
100.5 |
Highest since April 2008 |
|||||
|
EUR |
07:55 |
German Unemployment Change (AUG) |
-20K |
-17K |
Demand for labour continues to rise |
|||||
|
EUR |
07:55 |
German Unemployment Rate (AUG) |
7.6% |
7.6% |
||||||
|
EUR |
08:00 |
Italian Retail Sales (MoM) (JUN) |
0.1% |
0.3% |
First expansion after two consecutive contractions |
|||||
|
EUR |
08:00 |
Italian Retail Sales (YoY) (JUN) |
-0.5% |
0.5% |
||||||
|
GBP |
08:30 |
M4 Money Supply (MoM) (JUL) |
-- |
0.4% |
Fastest expansion in 2010 |
|||||
|
GBP |
08:30 |
M4 Money Supply (YoY) (JUL) |
-- |
2.3% |
Slowest expansion in 2010 |
|||||
|
GBP |
08:30 |
Mortgage Approvals (JUL) |
46.5K |
48.7K |
Highest reading since April |
|||||
|
GBP |
08:30 |
Net Consumer Credit (JUL) |
0.0B |
0.2B |
Bounces back from decline in June |
|||||
|
GBP |
08:30 |
Net Lending Sec. on Dwellings (JUL) |
0.7B |
0.1B |
Lowest level since March |
|||||
|
EUR |
09:00 |
Italian CPI (MoM) (AUG) |
0.2% |
0.2% |
Eases mildly from prior reading. |
|||||
|
EUR |
09:00 |
Italian CPI (YoY) (AUG) |
1.6% |
1.6% |
||||||
|
EUR |
09:00 |
Italian CPI – EU Harmonised (MoM) (AUG) |
-0.1% |
0.2% | ||||||
|
EUR |
09:00 |
Italian CPI – EU Harmonised (YoY) (AUG) |
1.7% |
1.8% | ||||||
|
EUR |
09:00 |
Italian Unemployment Rate (JUL) |
-- |
8.4% |
Continues to ease after hitting high in April |
|||||
|
EUR |
09:00 |
Euro-zone CPI Estimate (YoY) (AUG) |
1.6% |
1.6% |
Eases after hitting high in July. |
|||||
|
EUR |
09:00 |
Euro-zone Unemployment Rate (JUL) |
10.0% |
10.0% |
Fifth month unchanged, remains at 12-yr high. |
|||||
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