Talking Points:
- New Zealand Dollar falls as soft PSI data boosts RBNZ rate cut bets
- British Pound corrects higher after last week’s broad-based selloff
- US Dollar, Yen vulnerable as S&P 500 futures hit at risk-on mood
The New Zealand Dollar underperformed in overnight trade. The currency fell alongside front-end borrowing costs, hinting that firming RBNZ rate cut expectations may have been behind the move. A sharp drop in the Bank of New Zealand’s Performance of Services index may have helped spark the selloff. The report showed the pace of activity growth in the non-manufacturing sector plunged to the weakest since November 2014. The British Pound mounted what appeared to be a corrective recovery having lost ground against all of its major counterparts last week.
Looking ahead, a quiet economic calendar is likely to make for a quiet, consolidative start to the trading week. S&P 500 futures are pointing cautiously higher, hinting at a risk-on mood that may translate into near-term weakness for the anti-risk US Dollar and Japanese Yen. Lasting follow-through seems unlikely however. A wealth of high-profile event risk is due to cross the wires in the days ahead and traders are unlikely to commit to a firm directional bias in the interim.
Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 22:30 | NZD | Performance Services Index (JUL) | 54.2 | - | 56.4 |
| 23:01 | GBP | Rightmove House Prices (MoM) (AUG) | -1.2% | - | -0.9% |
| 23:01 | GBP | Rightmove House Prices (YoY) (AUG) | 4.1% | - | 4.5% |
| 23:50 | JPY | GDP SA (QoQ) (2Q P) | 0.0% | 0.2% | 0.5% |
| 23:50 | JPY | GDP Annualized SA (QoQ) (2Q P) | 0.2% | 0.7% | 2.0% |
| 23:50 | JPY | GDP Nominal SA (QoQ) (2Q P) | 0.2% | 0.2% | 0.8% |
| 23:50 | JPY | GDP Deflator (YoY) (2Q P) | 0.8% | 0.7% | 0.9% |
| 23:50 | JPY | GDP Private Consumption (QoQ) (2Q P) | 0.2% | 0.2% | 0.7% |
| 23:50 | JPY | GDP Business Spending (QoQ) (2Q P) | -0.4% | 0.2% | -0.7% |
| 04:30 | JPY | Industrial Production (MoM) (JUN F) | 2.3% | - | 1.9% |
| 04:30 | JPY | Industrial Production (YoY) (JUN F) | 1.5% | - | -1.9% |
| 04:30 | JPY | Capacity Utilization (MoM) (JUN) | -1.5% | - | -2.4% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 07:15 | CHF | Producer & Import Prices (MoM) (JUL) | -0.2% | 0.1% | Low |
| 07:15 | CHF | Producer & Import Prices (YoY) (JUL) | -0.9% | -1.0% | Low |
| 08:00 | CHF | Total Sight Deposits (AUG 12) | - | 511.4b | Low |
| 08:00 | CHF | Domestic Sight Deposits (AUG 12) | - | 437.3b | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EURUSD | 1.0991 | 1.1081 | 1.1122 | 1.1171 | 1.1212 | 1.1261 | 1.1351 |
| GBPUSD | 1.2691 | 1.2822 | 1.2871 | 1.2953 | 1.3002 | 1.3084 | 1.3215 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To receive Ilya's analysis directly via email, please SIGN UP HERE
Contact and follow Ilya on Twitter: @IlyaSpivak
