On Wednesday, the evergreen buck grew, moving off its recent minimums against the major Japanese currency overnight, as financial markets looked to a meeting of global major bankers in Jackson Hole, Wyoming for hints whether the Fed is braced for raising interest rates again or not.
Tuesday’s data revealed that in July, new American single-family home sales suddenly soared, reaching their highest value in almost nine years as demand surged broadly, brightening the housing market outlook.
At the end of the week, Fed Chair Janet Yellen is expected to address the key bankers gathered for the annual mountain retreat, which starts on Thursday.
Recent hawkish comments from Fed Vice Chairman Stanley Fischer as well as New York Fed President William Dudley have spurred some investors' hopes that Janet Yellen might take a less cautious tone.
The US dollar soared 0.1% to 100.30 yen having nudged below 100 yen overnight to 99.925.
The dollar index, traditionally estimating the evergreen buck’s strength against a basket of six key counterparts, grew 0.1%, being worth 94.593.
Aussie and Kiwi tumble moderately in Asia
The New Zealand and Australian dollars descended modestly after recent data revealed that missed hopes as well as cautious trade ruled ahead remarks due at the end of the trading week from the Fed Chair.
In Australia, construction work done edged down 3.7% during the second quarter, quite below the tumble of 1.9% observed quarter-on-quarter. Earlier, in New Zealand, July’s trade balance came in at a deficit of about NZ$433 million month-on-month as well as at a deficit of NZ$3.03 billion year-on-year. Both those outcomes have turned to be wider than expected.
The currency pair NZD/USD was worth 0.7285, down 0.05%. Meanwhile, AUD/USD sagged 0.01%, trading at 0.7614. USD/JPY traded at 100.26, showing a 0.02% rise.
Overnight, the greenback remained broadly lower against the other key currencies, as market participants remained cautious ahead of Friday’s statement by Fed Chair Janet Yellen.
In June, new home sales were revised down to 582,000 units a 1.7% revenue, from the previous reading of +3.5% to 592,000 units.
On Tuesday, the evergreen buck tumbled against the Japanese yen, while the New Zealand dollar went up right after the country’s major financial institution informed that they don’t see the necessity for a rapid succession of interest rate drops.
The evergreen buck lost 0.1% to 100.220 against the safe-haven Japanese yen amid a pullback in Tokyo shares.
The greenback had soared to nearly 101.00 yen overnight, reacting to hawkish-sounding comments by Federal Reserve Vice Chair Stanley Fischer.
The euro grew 0.1% to $1.1332, thus stepping off an overnight minimum of $1.1271.
The Australian dollar ascended 0.1%, being worth $0.7638 , moving up on the coattails of the New Zealand dollar.
The New Zealand dollar appeared to be a relatively big mover in a subdued Asian trading session.
The New Zealand dollar earned 0.6%, being worth $0.7308 after Reserve Bank of New Zealand Governor Graeme Wheeler informed that the current interest rate track suggests further monetary easing, although he didn’t see the need for an instant series of rate drops.
Kiwi rises further along with yen and Aussie
The New Zealand dollar kept rising in Asia, notwithstanding remarks from RBNZ Governor Graeme Wheeler on the scope for further interest rate drops, while the Australian dollar and the Japanese yen ascended too, following a light regional data day.
The currency pair NZD/USD was worth 0.7298, rising 0.36%. Meanwhile, AUD/USD traded at 0.7635, demonstrating a 0.20% soar, while USD/JPY was worth 100.13, tumbling 0.20%.
The US dollar index, gauging the US dollar’s value against a trade-weighted basket of six key counterparts, traded 94.46, descending 0.06%.
Traders are currently focused on a highly anticipated speech by Fed Chair Janet Yellen at the annual gathering of top major bankers as well as economists in Jackson Hole, Wyoming, this week for new signals on the timing of the approaching US rate lift.
Overnight, the evergreen buck pared profits against the other key currencies in subdued trade on Monday, though hopes for a probable American rate lift before the end of the year still ensure support to the US dollar.
On Tuesday, the evergreen buck hit one-month minimum against the Japanese yen, staying on the defensive after recent American economic data were seen likely to restrict the prospects of a near-term Fed interest rate lift.
The dollar tumbled 0.8% to 100.43 yen and hit a minimum of 100.355 yen at one point, the dollar’s lowest reading against the yen in more than a month.
It feels like there’s a broad acceleration in greenback-selling momentum.
Against a basket of six key currencies, the major American currency sagged 0.2%, hitting 95.417.
As for the common currency, it rose 0.1%, getting to $1.1195. Against the Japanese yen, the euro slumped 0.7% to 112.45 yen.
The greenback has rebounded against the Japanese yen and the common currency after weaker-than-expected July retail sales were observed likely to delay a Fed rate lift.
The markets will wait for American data later in the day including housing starts, consumer prices as well as industrial output for another chance to estimate the health of the economy.
Aussie holds narrow revenues after RBA board views on inflation
The Australian dollar held revenues during Asia trade after Australia major bank minutes noted uncertainty in inflation predictions as market participants kept monitoring policy moves by regional major banks.
The currency pair AUD/USD traded at 0.7677, showing a 0.05% rise, while USD/JPY traded at 101.03, tumbling 0.22%.
The US dollar index, measuring the greenback’s strength against a trade-weighted basket of six currencies, sank 0.03%, trading at 95.55.
Overnight, the evergreen buck sagged on Monday as a rash of subdued economic data in Asia backed the possibility for further stimulus measures from major banks, applying downside pressure on the volatile greenback.
On Monday, traders kept monitoring global major bank activity closely ahead of next week's Jackson Hole Summit for major bankers in Wyoming.
Meanwhile, the Nikkei dropped 0.3% amid subdued economic growth in Japan during the three-month period through June, driving concerns that further stimulus plans could be forthcoming right before the end of the year.
On Tuesday, the British pound sagged to fresh one-month minimums against the major American currency, after the issue of gloomy British manufacturing data contributed to worries regarding the actual strength of the British economy.
The currency pair GBP/USD grasped 1.2968 during European morning trade, the pair’s lowest reading since July 11. However, the given pair subsequently consolidated at 1.2978, dropping 0.47%.
Cable was about to find support at 1.2848, the minimum of July 11 as well as resistance at 1.3178, the peak of August 5.
The British Office for National Statistics told manufacturing production slumped by 0.3% in June, somewhat worse than expectations for a 0.2% dip and following a sag of 0.6% a month earlier, that was revised down from an initial 0.5% slump.
On an annualized basis, in June manufacturing production edged up 0.9%, worse than forecasts for a 1.3% leap.
The report also revealed that in June, industrial production went up by 0.1%, in line with forecasts. In June, year-on-year, industrial production soared by 1.6%, matching forecasts.
Aussie drops after weak NAB polls
The Australian dollar sagged during Asia trade after downbeat business surveys from National Australia Bank as well as consumer and producer prices data from China, suggesting mild pressure on prices although unlikely enough to spur any monetary policy action.
The currency pair AUD/USD was worth 0.7639, demonstrating a 0.16% tumble, while USD/JPY traded at 102.51, rising 0.06%.
In Australia, NAB business confidence was at plus-4 for July, compared to a previous outcome of plus-6, along with the NAB business poll that reached plus-8, versus a previous reading of plus-12.
China posted CPI for July with a 0.2% revenue in July, a faster tempo than the 0.1% revenue observed month-on-month as well as an annual level of 1.7%, just a bit below a 1.8% pace observed year-on-year. Meanwhile, PPI figures from China disclosed a dip of 1.7%, less than the drop of 2.0% year-on-year expected. The data came after weaker than expected imports the previous month in China posted on Monday and hit sentiment on demand prospects.
On Tuesday, the evergreen buck hovered close to three-week minimums after soft American economic data undermined the case for an early Fed rate lift while the Australian dollar geared up towards the likelihood of another policy easing later in the day.
The dollar index against a basket of six counterparts was worth 95.758, having dipped to as low as 95.384 the previous week when it reported its biggest descend for three months.
The index has struggled to gain a meaningful recovery since after the issue of quite poor American GDP growth for the June quarter the previous week.
Weaker-than-expected manufacturing data published on Monday kept holding the US dollar down. Asie from that, the influential Institute for Supply Management's index of national factory activity sagged to to 52.6 in July from June’s reading of 53.2, below market hopes for 53.0.
As for Fed funds futures, they’re pricing in less than a 40% probability of an interest rate lift by December.
Aussie heads south after data
The Australian dollar retraced earlier weakness notwithstanding downbeat trade as well as building approvals data and the Japanese yen sagged on the finance minister’s comments.
The currency pair AUD/USD was worth 0.7537, tumbling 0.01%, while USD/JPY traded at 102.67, showing a 0.24% rise after Japanese Finance Minister Taro Aso told exchange rates were demonstrating very nervous moves and that he was attentively watching currency movements. Aside from that, Prime Minister Shinzo Abe's government was about to approve ¥13.5 trillion in fiscal measure to boost the economy and also prices.
In Australia, June’s building approvals sagged 2.9%, compared to a 0.5% revenue seen month-on-month as well as the trade balance widened to a deficit of A$3.195 billion right from an expected deficit of about A$2 billion as well as last month’s figure of A$2.418 billion.
Later, New Zealand published inflation expectations for the second quarter, including the previous figure 1.6% quarter-on-quarter. The currency pair NZD/USD was worth 0.7172.
NYMEX and Brent dip slightly in Asia
On Wednesday, oil prices eased during Asia trade as industry data on American stockpiles appeared to be bearish.
According to estimates from the American Petroleum Institute, there was a sink of about 800,000 barrels the previous week, short of an expected descent of more than 2 million barrels, while the figures unveiled supplies at the oil-storage hub at Cushing, Okla surged by approximately 1.4 million barrels.
Additionally, Wednesday's government report could disclose that oil stockpiles sagged by about 2.3 million barrels for the week, with the 10th consecutive weekly sag in inventory levels nationwide. However, the current stockpile still remains above the five-year average by about 100 million barrels in spite of the recent drawdown.
In New York, September delivery WTI crude futures dipped 0.09%, hitting $42.88. Additionally, Brent crude sagged 0.15%, trading at $45.16 a barrel.
Overnight, American crude futures edged down to new 3-month minimums.
Gold prices edge down in Asia
Gold prices slumped during Asia trade with market participants glued for the latest policy review by the major American bank to be announced later today.
In New York, December delivery gold futures sank 0.24%, hitting $1,325.15 per troy ounce.
September delivery silver futures dipped 0.22%, trading at $19.640 per troy ounce, while September delivery copper futures surged 0.45%, trading at $2.233 per pound.
Overnight, the number one precious metal soared, remaining close to one-month minimums, as policymakers from the Federal Reserve obtained a final opportunity to digest a mixed pack of economic data ahead of a closely-watched interest rate verdict in the middle of the week.
The Federal Open Market Committee also dubbed FOMC is supposed to leave its benchmark interest rate at a targeted range 0.25%-0.50% for their fifth straight gathering. On Tuesday, the CME Group's Fed Watch tool placed the likelihood of a July rate lift at about 2.4%.
Aussie descends following mixed CPI data
The Australian dollar sagged during Asia trade after consumer price data kicked in a tad weaker than expected.
The currency pair AUD/USD was worth 0.7497, showing a 0.08% slump, while USD/JPY traded at 105.18, with a 0.52% rise.
In Australia, CPI data for the second quarter demonstrated a 0.4% soar quarter-on-quarter as expected. Meanwhile, the year-on-year figure was 1%, just a bit below the 1.1% pace observed.
As for year-on-year inflation - the most crucial number for the market as well as the Reserve Bank, it was somewhat higher than expected, hitting 1.5%.
Accordingly, the overall outcome is quite mixed, though still keeps alive the probability of a rate drop at the RBA's August board gathering. A lot will depend on how the RBA considers inflation pressures going ahead and that extent still-soft housing-related inflation. Obviously, soft non-tradable inflation might push Australia’s major financial institution over the line for a cut.