Daily Forex Fundamentals | Written by CMS Forex | Jul 09 08 20:11 GMT |
AUS Consumer Sentiment Falls to Lowest in 16 Years, Loans Drop By Largest in 8 Years
In Australia, last evening saw the WMI Consumer Sentiment index fall to -6.7%. It's the lowest level since January 1992 as higher gas and oil prices weigh down confidence. Despite a stronger retail sales report last week, recent data is showing the economy cooling. A second release today showed that home loans fell by 7.9% in May, the largest drop in 8 years. High interest rates and borrowing costs are curbing growth in the housing sector.
AUD/USD - Ausse Climbs 100 Pips from Low, as Greenback Weakness Enters Markets Following Iranian Missile Test
Following the release, the Aussie-US Dollar traded below 0.95, the lowest since June 19th. From this oversold level, the pair jumped about 100 pips as political evens brought pressure on the greenback. Overnight, Iran test fired several long range missiles, in a show of what kind of retaliation the country can take if its nuclear sites are attacked. The increase in tensions gave oil prices a lift after two days of sharp falls.
JPN Machine Orders Surge 10.4%
In Japan, orders for core machinery rose 10.4%, surging above expectations of a 1% increase. There was strong demand from emerging economies. Demand for equipment dealing with semiconductors and steel led the way.
EUR 1st Q GDP Revised Lower
In Europe, the final version of GDP for the first quarter showed GDP expanding 0.7% compared to the originally estimated 0.8%. The euro-zone has seen recent indicators from manufacturing, services and consumer spending all on the decline.
GER Trade Balance Slides as Exports Fall 2.3%
Exports from Germany fell 2.3%, the biggest fall since June 2004, as a strong Euro and weaker global growth impact demand. The trade surplus shrank to 14.4 billion euros as a result, far below forecasts. German exports have been a strong driver of activity for the euro-zone during the 1st quarter. Weaker foreign demand will pave the way for a rough 2nd quarter as domestic demand eases at the same time.
EUR/JPY - Rally in European Stocks Helps Euro Climb vs Yen
European stock markets recovered from yesterday fall, with the main indexes up around 1.5%. Shares of banks led the way as bargain hunters snapped up stocks in the battered sector. The Euro-Yen rose to a new high for the week, near 168.90, a 160 pip rally from yesterday's low. The rally ran out of steam around the NY open as US equities opened lower, giving some relief to the Yen.
UK Nationwide Consumer Confidence Falls to New Low, Goods Trade Deficit in Stable
In the UK, the nationwide consumer confidence index fell to a new low of 63. The biggest shift came in the future expectations sub-index which is falling as result of a weakening housing market and higher costs for food and fuel. The trade deficit in goods for May remained at its level in April of 7.5 billion pounds.
GBP/USD - Pound Jumps on Dollar Weakness to Rally 125 Pips Despite Weaker Data Earlier
The Pound-Dollar pair hit a low following the confidence data near 1.9675, but the rest of the overnight session and NY trading saw a 125 pip surge, bringing the pair back to yesterday's high at 1.98. If the pair stalls here, it looks to be forming a sideways range. In Monday's session the Pound was pressured by weak industrial production data.
CAN Housing Starts Perform Slightly Better Than Expected
Canadian housing starts measured an annual rate of 218K in June, which is down from May, but still a strong figure. Unlike in the US and UK, housing remains rather robust in Canada, though for how long this will last remains to be seen.
USD/CAD - Loonie Gains 100 Pips on Greenback, Strongest Session in a Week
The Loonie took the offensive against the greenback, with the US Dollar-Canadian Dollar pair sliding 100 pips to trade near 1.01. It's the biggest move in favor of the Loonie about a week, as the Canadian housing starts release, corresponded with higher oil prices and general US Dollar weakness in today's session.
USD/JPY - Dollar Rally Vs Yen Stalls at NY Open
Stocks in the US started off weaker, managed to break into the green as oil prices receded from their earlier jump, but by noon were back below their open for the day. The Dollar-Yen tested its high from yesterday near 107.65 but then retreated. Price action was quite tame with the pair looking like its consolidating.
Upcoming Releases - BOE Decision
Tonight, Japan releases its CGPI, a measure of inflation. Australia releases its employment change and unemployment rate, while New Zealand releases its manufacturing PMI.
In the later European session, the ECB will post its monthly bulletin. The Bank of England will finish its meeting and give its decision on interest rates, which are expected to stay at 5%, despite weakening growth in the economy. Tomorrow, the US has just one release its weekly jobless claims figure.
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