Talking Points:
- US Dollar may advance as Fed-speak stokes rate hike speculation
- Pound gains after Hammond argues for City of London status quo
- Yen correcting higher after yesterday’s broad-based down move
A relatively uneventful European data docket shifts the spotlight to comments from Boston and Dallas Fed Presidents Eric Rosengren and Robert Kaplan in the final hour of the trading week. Traders are almost certainly eager to onboard the last bits of guidance before the two-week blackout period ahead of this month’s FOMC meeting. Hawkish posturing in line with recent remarks from other US central bank officials may boost rate hike speculation, sending the US Dollar higher.
The Japanese Yen outperformed in overnight trade, trading broadly higher in a move that appeared to be corrective after the currency lagged its major counterparts in the prior session. The British Pound continued to recover from selling pressure that plagued the UK unit through most of yesterday’s European session. Losses appeared to accelerate in the run-up to testimony from Chancellor Philip Hammond before the House of Lords Economic Affairs Committee.
Concerns about the post-Brexit future of the City of London as regional financial hub seemed to be front and center for investors. Sterling bottomed and began to recover as Hammond spoke, possibly reflecting the government’s apparent commitment to defend the status quo. The Chancellor said the City supports the real economy across Europe and breaking it up – including the splitting up of clearing services – would be a mistake for the EU.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 22:45 | NZD | Card Spending Retail (MoM) (AUG) | -0.4% | 0.3% | 0.2% |
| 22:45 | NZD | Card Spending Total (MoM) (AUG) | -0.8% | - | 0.3% |
| 23:50 | JPY | Money Stock M2 (YoY) (AUG) | 3.3% | 3.3% | 3.4% |
| 23:50 | JPY | Money Stock M3 (YoY) (AUG) | 2.8% | 2.9% | 2.9% |
| 1:30 | CNY | CPI (YoY) (AUG) | 1.3% | 1.7% | 1.8% |
| 1:30 | CNY | PPI (YoY) (AUG) | -0.8% | -0.9% | -1.7% |
| 1:30 | AUD | Home Loans (MoM) (JUL) | -4.2% | -1.5% | 1.7% |
| 1:30 | AUD | Investment Lending (JUL) | 0.5% | - | 3.3% |
| 1:30 | AUD | Owner-Occupier Loan Value (MoM) (JUL) | -3.1% | - | 1.6% |
| 4:30 | JPY | Tertiary Industry Index (MoM) (JUL) | 0.4% | 0.8% |
European Session
| GMT | CCY | EVENT | EXP/ACT | PREV | IMPACT | |
|---|---|---|---|---|---|---|
| 5:45 | CHF | Unemployment Rate (AUG) | 3.2% (A) | 3.1% | Medium | |
| 5:45 | CHF | Unemployment Rate SA (AUG) | 3.4% (A) | 3.3% | Medium | |
| 6:00 | EUR | German Trade Balance (JUL) | 19.5b (A) | 24.7b | Medium | |
| 6:00 | EUR | German Current Account Balance (JUL) | 18.6b (A) | 26.3b | Medium | |
| 6:00 | EUR | German Exports SA (MoM) (JUL) | -2.6% (A) | 0.2% | Low | |
| 6:00 | EUR | German Imports SA (MoM) (JUL) | -0.7% (A) | 1.1% | Low | |
| 8:30 | GBP | Visible Trade Balance (£/Mn) (JUL) | -11650 | -12409 | Medium | |
| 8:30 | GBP | Trade Balance Non EU (£/Mn) (JUL) | -3600 | -4159 | Low | |
| 8:30 | GBP | Trade Balance (£/Mn) (JUL) | -4200 | -5084 | Low | |
| 8:30 | GBP | Construction Output (MoM) (JUL) | -0.5% | -0.9% | Low | |
| 8:30 | GBP | Construction Output (YoY) (JUL) | -3.4% | -2.2% | Low | |
| 8:30 | GBP | BoE/TNS Inflation Next 12 Mths (AUG) | - | 2.0% | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.1162 | 1.1204 | 1.1222 | 1.1246 | 1.1264 | 1.1288 | 1.1330 |
| GBP/USD | 1.3123 | 1.3245 | 1.3293 | 1.3367 | 1.3415 | 1.3489 | 1.3611 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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