News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Heads Up:🇯🇵 Consumer Confidence (JUL) due at 05:00 GMT (15min) Previous: 37.4 https://www.dailyfx.com/economic-calendar#2021-08-02
  • Heads Up:🇮🇳 Markit Manufacturing PMI (JUL) due at 05:00 GMT (15min) Expected: 50.5 Previous: 48.1 https://www.dailyfx.com/economic-calendar#2021-08-02
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/Cp7rWEyFSQ
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.66%, while traders in Wall Street are at opposite extremes with 74.99%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/3A9cyM59SZ
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.03% 🇯🇵JPY: 0.00% 🇦🇺AUD: -0.03% 🇨🇦CAD: -0.04% 🇨🇭CHF: -0.04% 🇳🇿NZD: -0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/BKGiHCcP2s
  • Gold Prices Risk Forming a “Double Top” Despite Yields Drop https://www.dailyfx.com/forex/market_alert/2021/08/02/Gold-Prices-Risk-Forming-a-Double-Top-Despite-Yields-Drop.html https://t.co/1eAb5dp3ew
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.52% US 500: 0.51% FTSE 100: 0.49% France 40: 0.47% Wall Street: 0.43% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/PJsDVKC0H2
  • 🇮🇩 Inflation Rate YoY (JUL) Actual: 1.52% Expected: 1.45% Previous: 1.33% https://www.dailyfx.com/economic-calendar#2021-08-02
  • Heads Up:🇮🇩 Inflation Rate YoY (JUL) due at 04:00 GMT (15min) Expected: 1.45% Previous: 1.33% https://www.dailyfx.com/economic-calendar#2021-08-02
  • (ASEAN Fundy) US Dollar Outlook: SGD, THB, IDR, PHP May Benefit on Slowing Covid Growth, Soft NFPs #USD #ASEAN $USDSGD $USDTHB $USDIDR $USDPHP https://www.dailyfx.com/forex/fundamental/article/special_report/2021/08/02/US-Dollar-Outlook-SGD-THB-IDR-PHP-May-Benefit-on-Slowing-Covid-Growth-Soft-NFPs.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/e5WczRhUl6
Currency Markets Look to China CPI, Euro Crisis for Direction Cues

Currency Markets Look to China CPI, Euro Crisis for Direction Cues

Ilya Spivak, Head Strategist, APAC

Major Currencies vs. US Dollar (% change)

30 Jul 2012 – 03 Aug 2012

Currency_Markets_Look_to_China_CPI_Euro_Crisis_for_Direction_Cues_body_Picture_5.png, Currency Markets Look to China CPI, Euro Crisis for Direction Cues

Talking Points

  • China CPI, Bernanke Comments Headline Thin Economic Calendar
  • ECB Monthly Report in Focus for Non-Standard Measures Guidance
  • BOJ, RBA Interest Rate Decisions Expected to See Policy Unchanged
  • UK Inflation Report Unlikely to Offer Substance on BOE Outlook

Most major currency pairs continue to show strong correlations with the MSCI World Stock Index, reflecting an intimate sensitivity to sentiment trends. USDJPY is a lone exception, but an iron-clad relationship with the 10-year Treasury yield still anchors the pair to risk appetite given the haven status of US debt. On balance, that keeps familiar big-picture themes – the degree of slowdown in global economic growth and the severity of the Eurozone debt crisis – front and center for the spectrum of major currencies in the week ahead.

On the economic growth front, traders will look to a sparse economic calendar for direction cues. Chinese CPI figures are expected to show inflation slowed to an annual pace off 1.7 percent in July, marking the lowest reading since January 2010. Traders may treat the figure as allowing the PBOC some space for added stimulus after the ECB and the Federal Reserve disappointed hopes for further accommodation last week. China is the third-largest engine of global output after the US and the Euro area (taken collectively), so further easing there has scope to boost market-wide risk appetite. A pair of speeches from Fed Chairman Ben Bernanke round out the docket of big-ticket event risk. Murmurs of a QE3 announcement at September’s FOMC meeting are already swirling and traders will look for confirmation in the Fed chief’s comments, though little new guidance is likely to emerge just days after the last rate decision.

Turning to the Eurozone, all eyes are on Spain after Prime Minister Mariano Rajoy took a small step toward asking for a formal bailout at a press conference on Friday, saying he would condition such a decision on the non-standard measures to contain periphery countries’ borrowing costs being planned at the ECB. For his part, ECB President Mario Draghi has clearly started to plant the seeds for the unveiling of some kind of funding-stress relief. Draghi first brought runaway bond yields into the ECB mandate with a speech in London two weeks ago and then alluded to “non-standard policy measures” to be hashed out in the “coming weeks” at the monthly press conference last week. Details remain absent however and traders will keep a close eye on Augusts’ ECB Monthly Report for any additional guidance.

Elsewhere on the docket, the quarterly UK Inflation Report will help shape expectations of BOE monetary policy in the months ahead. Traders are unlikely to find much beyond a reinforcement of the already familiar wait-and-see posture as Mervyn King and company gauge the impact of the recently unveiled ECTR and FLS programs before tinkering with new ideas. The Reserve Bank of Australia is widely expected to hold rates unchanged at 3.5 percent, with traders pricing a paltry 17 percent probability of another 25bps reduction. The focus will be on the bank’s rhetoric as guidance for further policy, with investors still betting on 75bps in further easing over the coming 12 months. The Bank of Japan is likewise seen holding policy as-is, although further fine-tuning in the bank’s non-standard stimulus programs similar to last month’s reshuffling may emerge

EURO

Currency_Markets_Look_to_China_CPI_Euro_Crisis_for_Direction_Cues_body_eur.png, Currency Markets Look to China CPI, Euro Crisis for Direction Cues

Source: Bloomberg

Key Event Risk

DAY

GMT

EVENT

EXP

PREV

IMPACT

07 AUG

10:00

German Factory Orders (MoM) (JUN)

-0.8%

0.6%

Medium

07 AUG

10:00

German Factory Orders (YoY) (JUN)

-7.0%

-5.4%

Medium

08 AUG

10:00

German Industrial Production (MoM) (JUN)

-0.8%

1.6%

Medium

08 AUG

10:00

German Industrial Production (MoM) (JUN)

0.3%

0.0%

Medium

09 AUG

08:00

ECB Publishes August Monthly Report

-

-

High

10 AUG

06:00

German Consumer Price Index (MoM) (JUL F)

0.4%

0.4%

Low

10 AUG

06:00

German Consumer Price Index (MoM) (JUL F)

1.7%

1.7%

Low

BRITISH POUND

Currency_Markets_Look_to_China_CPI_Euro_Crisis_for_Direction_Cues_body_gbp.png, Currency Markets Look to China CPI, Euro Crisis for Direction Cues

Source: Bloomberg

Key Event Risk

DAY

GMT

EVENT

EXP

PREV

IMPACT

07 AUG

08:30

Industrial Production (MoM) (JUN)

-3.5%

1.0%

Medium

07 AUG

08:30

Industrial Production (MoM) (JUN)

-5.3%

-1.6%

Medium

08 AUG

09:30

Bank of England Inflation Report

-

-

High

10 AUG

08:30

PPI Output (MoM) (JUL)

0.0%

-0.4%

Medium

10 AUG

08:30

PPI Output (YoY) (JUL)

2.0%

2.3%

Medium

JAPANESE YEN

Currency_Markets_Look_to_China_CPI_Euro_Crisis_for_Direction_Cues_body_jpy.png, Currency Markets Look to China CPI, Euro Crisis for Direction Cues

Source: Bloomberg

Key Event Risk

DAY

GMT

EVENT

EXP

PREV

IMPACT

07 AUG

23:50

Current Account Total (¥) (JUN)

415.2B

215.1B

Medium

08 AUG

23:50

Machine Orders (MoM) (JUN)

11.0%

-14.8%

Low

08 AUG

23:50

Machine Orders (YoY) (JUN)

-5.3%

1.0%

Low

09 AUG

23:50

Domestic CGPI (YoY) (JUL)

-1.5%

-1.3%

Low

09 AUG

-

Bank of Japan Rate Decision

0.10%

0.10%

High

CANADIAN DOLLAR

Currency_Markets_Look_to_China_CPI_Euro_Crisis_for_Direction_Cues_body_cad.png, Currency Markets Look to China CPI, Euro Crisis for Direction Cues

Source: Bloomberg

Key Event Risk

DAY

GMT

EVENT

EXP

PREV

IMPACT

09 AUG

12:15

Housing Starts (JUL)

213.5K

222.7K

Medium

10 AUG

12:30

Unemployment Rate (JUL)

7.2%

7.2%

Medium

10 AUG

12:30

Net Employment Change (JUL)

9.0K

7.3K

Medium

AUSTRALIAN DOLLAR

Currency_Markets_Look_to_China_CPI_Euro_Crisis_for_Direction_Cues_body_aud.png, Currency Markets Look to China CPI, Euro Crisis for Direction Cues

Source: Bloomberg

Key Event Risk

DAY

GMT

EVENT

EXP

PREV

IMPACT

07 AUG

04:30

RBA Rate Decision

3.50%

3.50%

High

09 AUG

01:30

Employment Change (JUL)

10.0K

-27.0K

Medium

09 AUG

01:30

Net Employment Change (JUL)

5.3%

5.2%

Medium

NEW ZEALAND DOLLAR

Currency_Markets_Look_to_China_CPI_Euro_Crisis_for_Direction_Cues_body_nzd.png, Currency Markets Look to China CPI, Euro Crisis for Direction Cues

Source: Bloomberg

Key Event Risk

DAY

GMT

EVENT

EXP

PREV

IMPACT

08 AUG

22:45

Unemployment Rate (2Q)

6.5%

6.7%

Medium

08 AUG

22:45

Employment Change (QoQ) (2Q)

0.4%

0.4%

Medium

08 AUG

22:45

Employment Change (YoY) (2Q)

1.2%

0.9%

Medium

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

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

To be added to Ilya's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES