Chinese statistics data supported commodity currencies

August 12, 2013

The US dollar was traded downwards on Friday Vs the yen and commodity currencies and slightly upwards Vs major European currencies. The Canadian dollar had ignored the employment report for July by the end of the day which turned out worse than expected. Employment rate in Canada fell unexpectedly by 39.4 thousand (expected growth by 10 thousand) and unemployment rate increased by 0.1% up to 7.2%. 

Chinese statistics data supported commodity currencies which showed industrial output growth and moderate inflation. Industrial output grew by 9.7% in July at an annual rate (Vs Consensus 8.9%) and fixed-asset investment rose by 20.1%. The euro was traded downwards after having reached 7-week high against the dollar. Some pressure was put by French industrial output which shrank by 1.4% m/m while a growth by 0.3% was expected. 

By the end of the week the dollar had lost 1% according to the dollar index still being under pressure after the publication of key Non-Farm Payrolls report that turned out disappointing. The largest growth Vs US dollar was shown by the Australian dollar (+3.28%), Japanese yen (+2.81%), New Zealand dollar (+2.73%) and British pound (+1.44%). This week there will be a release of GDP, inflation, industrial output and retail sales data.

The main event of the week may become Wednesday release of preliminary GDP for the second quarter of major countries and the whole euro-zone. Euro-zone GDP is expected to grow for the first time in 6-quarter recession. German and Euro-Zone ZEW Economic Sentiment and euro-zone industrial output will be released on Tuesday – indicators’ growth is expected. It is a day off on Thursday in France and Italy and on Friday there will be a release of euro-zone inflation, trade balance and current account data.

On Wednesday in Great Britain there will be a release of Bank of England Meeting Minutes and non-farm payrolls report. MPC Official Bank Rate Votes and Asset Purchase Facility Votes will attract attention. The Meeting minutes are expected to show a unanimous vote to keep everything unchanged. Unemployment rate will also draw attention as the Bank of England tied its monetary policy to this indicator and promised to toughen the policy until unemployment fell to 7%. Producer and Consumer Price Indexes will be released on Tuesday and retail sales – on Thursday.  

In New Zealand also a quarter retail sales report will be published on Wednesday and Business NZ Manufacturing Index – on Thursday. In Australia NAB Business Confidence Index will be released on Tuesday and Westpac Consumer Confidence Index – on Wednesday. Japanese Flash GDP for the second quarter will be released on Monday.

There are rather a lot of US data. On Tuesday – retail sales. Producer Price Index will be released on Wednesday and Consumer Price Index – on Thursday. On Thursday capital inflow, industrial output and Philadelphia Fed Manufacturing Index will be published. On Friday House Price Balance (Building Permits and Housing Starts) and also Prelim U. of Michigan Consumer Sentiment will be published.

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