23 August, 2013
The Japanese equities ended the session in the green zone; the Nikkei 225 stocks surged 2.21%, Topix index added 1.97%. In opposition, the Chinese stocks lost ground on tighter liquidity concerns. The emerging market currencies showed mixed performances: Indian Rupee rebound from historical lows to 64.30 per dollar, Turkish Lira saw demand pre-1.9975, while Brazilian Real halted losses after Brazil central bank announced a large FX intervention program to support BRL.
USDJPY and JPY crosses were better bid in Tokyo. USDJPY cleared offers at 98.80 (daily cloud base) and advanced to 99.11 on US short term funds, Japanese importers and usual pre-weekend adjustment. Next set of offers stand at 99.95/100, while option bids are seen at 98.95, then at 98. EURJPY advanced to 132.34 – one month high.
Euro remained well bid amid ECB Nowotny said that the recent “stream of good news” in the Euro-zone removed the need for further rate cut. Whilst the markets remained muted to stronger-than-expected preliminary August PMI, EURUSD saw support above 1.3300 and traded within tight range of 1.3335/68. Released in the morning, data showed that the German GDP remained in line with expectations in the second quarter, while government spending, capital and construction investments advanced more than expected. Domestic demand improved 0.6%, exports and imports advanced 2.2% and 2.0% respectively.
AUD partly recovered yesterday’s losses; AUDUSD saw light resistance at 0.9000, rallied to 0.9040 and tumbled back to 0.8990/0.9010 in Europe opening. AUDNZD remained well supported above 1.1490/1.1500.
In Canada, the weak retail sales in June gave a good reason to clear resistance at 1.0500 against the US dollar. USDCAD rallied to 1.0557, the highest since July 9th. The bias remains solidly on the upside.
Ahead of the preliminary second quarter GDP numbers, GBPUSD extended weakness to 1.5563, and consolidated below 1.5600 in New York and Asian sessions. As the pair remains within the broad uptrend channel, any positive surprise in data should give a fresh boost to GPBUSD before the week-end.
Today, the markets will focus on German 2Q(Final) GDP q/q & y/y, Private Consumption, Government Spending, Capital & Construction Investment and Domestic Demand q/q, German 2Q Exports & Imports q/q, UK 2Q (Preliminary) GDP q/q & y/y, Gross Fixed Capital Formation q/q, Exports & Imports q/q, Total Business Investment q/q & y/y and July BBA Loans for House Purchase, Canadian July CPI m/m & y/y, US July New Home Sales m/m and Euro-Zone August (Advance) Consumer Confidence.