17 Aug 2015
Broad based USD strength extends in Asia, Greece back in focus
FXStreet (Mumbai) - The US dollar extends its recovery mode across the board from last Wednesday’s PBOC yuan fix-led sell-off, keeping USD/JPY supported near 124.40 levels. While the Antipodean currencies trading mixed, although in a flat-lining little affected by the today’s steady yuan reference rate.
Key headlines in Asia
Japan’s Q2 GDP contracts to 0.4% for the 1st time since 2014 Q4
China's Central Bank sets Yuan midpoint at 6.3969 versus 6.3918 Friday
‘Q2 GDP hit by bad weather, mini vehicle tax hike’ – Japan’s EcoMin Amari
Dominating themes in Asia - centered on JPY, AUD, NZD
A low-key affair in Asia, with markets digesting softer Japan’s GDP data as well as Japan’s economic minister Amari’s briefing on the same. USD/JPY clinched gains near 124.50 levels after the yen was hit by poor Japan’s economic data which revealed that output from the world's third-largest economy shrank for the first time since 2014 Q4, owing to weak exports and soft private demand, putting greater pressure on policymakers for further easing its monetary policy due later on Thursday.
GDP growth fell 0.4% in the June quarter, the first estimate from Japan's Cabinet Office showed on Monday, coming in slightly stronger than the market forecast of a 0.5% contraction, but turning around sharply from the first-quarter expansion of 1.0%.
While the antipodean currencies mostly traded mixed, with the Aussie staying in the red below 0.7400 levels while the Kiwi was side-lined below 0.6550 levels as traders gear up for a busy week ahead with US CPI figures and FOMC minutes to confirm the recent strength in the greenback as the latter is likely to lead us into to the next FOMC and showdown in September where markets have been pricing in a possible rate hike from the Fed.
Asian markets traded mostly mixed; with Nikkei and the ASX leading higher, Shanghai stocks bucked the trend on a relatively firmer yuan. The Japanese benchmark Nikkei 225 pared early gains and now trades higher by 0.16% at 20552. The benchmark Australian S&P/ASX 200 index trimmed gains to trade at 5372 points, +0.27%. While Hong Kong's benchmark Hang Seng index is losing over 1% at 23736 and mainland China's benchmark Shanghai Composite slightly lower by -0.12% and trades near 3960.
Heading into Europe - centered on EUR, GBP
A data-dry European calendar ahead awaits EUR,GBP traders with the only data on cards will be Euro zone trade balance data.
However, attention now turns back to Greece, as the big ECB repayment and Greek parliamentary vote looms later this week just as the embattled-nation may be heading into snap elections next month.
August 20 is the very day when Greece is scheduled to honor a big €3.5 billion bond repayment to the European Central Bank (ECB).
Looking ahead towards the New York session, we have couple of macro data points lined up for release – NAHB housing and Empire State manufacturing index, ahead of a data-heavy US calendar this week.
EUR/USD Technicals
The AceTrader Team explained, “Despite euro's sharp sell-off from Wednesday's high at 1.1214 to 1.1080 on Thursday, subsequent strong rebound suggests the pullback has possibly ended and consolidation with upside bias would be seen, above 1.1189 would add credence to this view and yield resumption of recent erratic uptrend from July's trough at 1.0808 for a re-test of said high, break would extend towards 1.1250/60 later this week.”
“On the downside, only below 1.1080 would confirm a temporary top has been made and risk would shift to the downside for a stronger retracement towards 1.1031.”
Key headlines in Asia
Japan’s Q2 GDP contracts to 0.4% for the 1st time since 2014 Q4
China's Central Bank sets Yuan midpoint at 6.3969 versus 6.3918 Friday
‘Q2 GDP hit by bad weather, mini vehicle tax hike’ – Japan’s EcoMin Amari
Dominating themes in Asia - centered on JPY, AUD, NZD
A low-key affair in Asia, with markets digesting softer Japan’s GDP data as well as Japan’s economic minister Amari’s briefing on the same. USD/JPY clinched gains near 124.50 levels after the yen was hit by poor Japan’s economic data which revealed that output from the world's third-largest economy shrank for the first time since 2014 Q4, owing to weak exports and soft private demand, putting greater pressure on policymakers for further easing its monetary policy due later on Thursday.
GDP growth fell 0.4% in the June quarter, the first estimate from Japan's Cabinet Office showed on Monday, coming in slightly stronger than the market forecast of a 0.5% contraction, but turning around sharply from the first-quarter expansion of 1.0%.
While the antipodean currencies mostly traded mixed, with the Aussie staying in the red below 0.7400 levels while the Kiwi was side-lined below 0.6550 levels as traders gear up for a busy week ahead with US CPI figures and FOMC minutes to confirm the recent strength in the greenback as the latter is likely to lead us into to the next FOMC and showdown in September where markets have been pricing in a possible rate hike from the Fed.
Asian markets traded mostly mixed; with Nikkei and the ASX leading higher, Shanghai stocks bucked the trend on a relatively firmer yuan. The Japanese benchmark Nikkei 225 pared early gains and now trades higher by 0.16% at 20552. The benchmark Australian S&P/ASX 200 index trimmed gains to trade at 5372 points, +0.27%. While Hong Kong's benchmark Hang Seng index is losing over 1% at 23736 and mainland China's benchmark Shanghai Composite slightly lower by -0.12% and trades near 3960.
Heading into Europe - centered on EUR, GBP
A data-dry European calendar ahead awaits EUR,GBP traders with the only data on cards will be Euro zone trade balance data.
However, attention now turns back to Greece, as the big ECB repayment and Greek parliamentary vote looms later this week just as the embattled-nation may be heading into snap elections next month.
August 20 is the very day when Greece is scheduled to honor a big €3.5 billion bond repayment to the European Central Bank (ECB).
Looking ahead towards the New York session, we have couple of macro data points lined up for release – NAHB housing and Empire State manufacturing index, ahead of a data-heavy US calendar this week.
EUR/USD Technicals
The AceTrader Team explained, “Despite euro's sharp sell-off from Wednesday's high at 1.1214 to 1.1080 on Thursday, subsequent strong rebound suggests the pullback has possibly ended and consolidation with upside bias would be seen, above 1.1189 would add credence to this view and yield resumption of recent erratic uptrend from July's trough at 1.0808 for a re-test of said high, break would extend towards 1.1250/60 later this week.”
“On the downside, only below 1.1080 would confirm a temporary top has been made and risk would shift to the downside for a stronger retracement towards 1.1031.”