Currency movers for August 12, 2015

12 August, 2015

EURUSD, Daily

EURUSD rallied to the 1.1090 resistance identified in my report yesterday. The pair reacted lower but then attracted buyers at an intraday support at 1.1012. This has led to a fifth consecutive up day with price once again trying to challenge the resistance area above 1.1090.  EURUSD is trading inside the upper Bollinger Bands (1.5 and 2 stdv) and the Stochastics is getting overbought. Trend in 4h resolution has been strong and suggest that this will be another day without a significant correction in EURUSD but the upside is indeed getting limited as the resistance area is near. EURUSD is trading near levels that have been able to turn price lower before, therefore I expect that in today’s trading upside will be limited to 1.1090 – 1.1130 range.

The PBoC devalued again, shifting the yuan’s reference rate to 6.3306 versus the dollar, which is a 1.6% weakening of the Chinese currency relative to yesterday’s 6.228 (which itself marked a 1.9% depreciation). There seems a degree of acceptance in markets, with Credit Suisse economists, for instance, calculating that the yuan was 5 to 10% overvalued going into the devaluations, adding that anything more than a 10% shift in the currency would spark political backlash. Incoming Chinese data today, including production, retail sales and fixed-asset investment, showed weakness.

German lawmakers not ready to wave through Greek bailout. There are reports that German Chancellor Merkel is facing opposition to the plan to let lawmakers vote on the third Greek bailout package early next week. A deputy to Finance Minister Schaeuble told ARD television that “one needs to look closely” and “ask the Bundestag for approval when the common understanding is that this will hold for three years”. If there is a delay it could derail Greece’s close time table and the race to get political approval before Greece faces another big ECB repayment on August 20.

German insolvencies are falling sharply, with the overall number down 6.6% y/y in the year to date and down 10.6% y/y in May alone. This is another sign of a relatively robust domestic economy, but also a reflection of the fact that especially small companies in Germany are facing fewer financing constraints than companies elsewhere in the Eurozone. The low interest rate environment and robust domestic demand are also helping t hem to perform.

Yesterday US wholesale sales edged up 0.1% in June and inventories rose up 0.9%. The 0.3% May sales gain was nudged down to 0.2%. May’s 0.8% jump in inventories was revised lower to 0.6% (0.4% April). The inventory-sales ratio increased to 1.30 from 1.29 (revised from 1.29). Gains in most of the nondurable sales components slightly offset broad-based declines in the durable goods sales. Inventories were boosted by autos and drugs. The data will help fine tune GDP estimates.

2015-08-12_1010

Currency Movers Charts

This is yet another day that the market participants are selling Australian dollar due to another currency devaluation in China. AUD is down against the competitors across the board while money has been flowing into CHF. This is a sign that markets are concerned about these surprise moves by the PBOC and feel the need of finding a safe haven. AUDUSD tested the 0.7237 support earlier today and has rallied slightly at the time of writing. The nearest resistance is now at 0.7315.  EURAUD moved to the 1.5277 resistance and is now near to another resistance at 1.5332. GBPAUD is trading inside the upper daily Bollinger bands and has reacted slightly lower from the resistance.

Significant daily support and resistance levels for these pairs are:

2015-08-12_1016

Main Macro Events Today

  • Main Macro Events TodayUK Claimant Account Change for July is expected to come in at 1.5k compared to previous figure of 7.0k.
  • Eurozone industrial production: there should be a decline in June production numbers of -0.1% m/m (median same0), after the disappointing German number. Data may be too backward looking to be a major market mover or change the overall outlook, but a weak number will add to prevailing risk aversion, especially after the surprise drop in the ZEW yesterday.
  • US Treasury Budget: July treasury data is out today and is expected to reveal a $149 bln (median -$129.8 bln) deficit for the month. This compares to a $51.8 bln surplus in June and a $94.6 bln deficit in July of last year. Receipts are expected at $224 bln, up 4.6% y/y with outlays at $374 bln, up 20.9% y/y.

2015-08-12_1009


Source link  
US reports revealed modest upside surprises for December trade

Asian stock markets mostly moved higher overnight, with Nikkei and Topix was trading close to levels last seen in December 2015 as the Yen weakened...

The global stock rally continued in Asia overnight

Reuters reported, the fast-growing financial technology (Fintech) sector could hold big “systemic risks” for the banking sector and the broader economy which need to be addressed by bank regulators around the world, Bank of England Governor Mark Carney said on Wednesday...

Too-strong a dollar may hurt the economy

Japanese stock markets moved higher, led by Japanese bourses as the country managed to snap a 14-month long run of falling exports, which helped the Nikkei to close with a 1.4% gain...


Dollar found its feet after declining over the last day

Asian stock markets were mixed overnight, with Japanese bourses still under pressure (Nikkei closed down 0.55%). despite a dip in the Yen, as USD stabilised. Uncertainty over Trump’s regulatory and trade policies continues to weigh on investor sentiment...

The dollar has settled moderately lower

Asian stock markets were mixed overnight, after U.S. and European shares closed in the red Thursday. Japan and mainland China bourses managed to move higher (Chinese GDP beat expectations at 6.8%)...

Stock markets continued to stabilise

German HICP confirmed at 1.7% y/y, as expected, with prices up 1.0% m/m. The sharp acceleration from just 0.7% y/y in November was mainly due to base effects from lower energy prices and the breakdown showed that prices for heating oil jumped 21.9% y/y in December...


ECB policy was focused on avoiding deflation trap

Asian stock markets were mixed, with Japan and ASX heading south amid reports that U.K. Prime Minister May will announce plans for a hard Brexit at today’s keynote speech. Yen strength is also continuing to put pressure on the Japanese markets...

U.S. markets are closed Monday

U.S. markets are closed Monday for Martin Luther King Day. This will be a busy week for traders, with the inauguration of president-elect Trump on Friday headlining...

The dollar is trading softer into the London open

Aftershocks from President-elect Trump’s campaign-like press conference, which had weighed on global stock markets and yields started to recede late in the U.S. session and U.S. equities managed to recover part of their losses...

  


Share: