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

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

Ilya Spivak, Head Strategist, APAC

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

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

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