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G7 Comments May Help Aussie, NZ Dollar Rebound as Yen Falls

G7 Comments May Help Aussie, NZ Dollar Rebound as Yen Falls

Talking Points:

  • Yen falls, commodity-bloc FX gains as risk appetite recovers overnight
  • New Zealand Dollar outperforms on fading RBNZ rate cut speculation
  • G7 officials’ comments may help sentiment rebound into the week-end

The Japanese Yen underperformed in overnight trade as stocks advanced, weighing on the anti-risk currency. Not surprisingly, the sentiment-linked Australian and New Zealand Dollars traded higher alongside share prices.

The Kiwi outperformed as the island nation’s front-end bond yields pushed upward, hinting at ebbing RBNZ rate cut speculation. Indeed, a gauge of the priced-in 12-month outlook implied in OIS rates has moved to the least dovish in four months.

The overall risk appetite recovery likely reflects corrective flows after yesterday’s Fed-inspired selloff. Fears of imminent stimulus withdrawal swelled as traders digested unmistakably hawkish rhetoric within minutes from April’s FOMC meeting, pushing the MSCI Asia Pacific regional benchmark equity index to a monthly low.

Stock index futures are trading notably higher ahead of the opening bell in Europe, hinting the risk-on mood is aiming to carry through into the week-end. Sideline comments from a meeting of G7 finance ministers and central bank governors may help if officials hint at on-coming fiscal measures to boost sagging global growth as monetary efforts appear increasingly stretched.

What does retail traders’ buying and selling say about market trends? Find out here !

Asia Session

GMTCCYEVENTACTEXPPREV
22:45NZDNet Migration SA (APR)5520-5330
3:00NZDCredit Card Spending (MoM) (APR)2.5%--1.4%
3:00NZDCredit Card Spending (YoY) (APR)9.1%-4.8%
5:00JPYNationwide Dept Sales (YoY) (APR)-3.8%--2.9%
5:00JPYTokyo Dept Store Sales (YoY) (APR)-1.5%--1.1%

European Session

GMTCCYEVENTEXP/ACTPREVIMPACT
6:00EURGerman PPI (MoM) (APR)0.1% (A)0.0%Medium
6:00EURGerman PPI (YoY) (APR)-3.1% (A)-3.1%Medium
7:00JPYConvenience Store Sales (YoY) (APR)--0.1%Low
8:00EURECB Current Account SA (MAR)-19.0bLow
8:00EURECB Current Account NSA (MAR)-11.1bLow
10:00GBPCBI Trends Total Orders (MAY)-13-11Low
10:00GBPCBI Trends Selling Prices (MAY)-4Low

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EUR/USD1.11041.11541.11791.12041.12291.12541.1304
GBP/USD1.44101.45111.45611.46121.46621.47131.4814

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

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

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