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30 Jul 2015
AUD bulls retain control in Asia, US Q2 GDP – In spotlight
FXStreet (Mumbai) - Despite worse-than expected Australia’s building consents data, the Australian dollar kept its upside momentum intact, defending gains above 0.73 handle. The Kiwi was heavily offered on rising greenback while USD/JPY also benefitted from a broadly stronger US dollar, enjoying post-FOMC gains.
Key headlines in Asia
Australia’s building approvals fall in June - worse than expectations
Watch out for accumulating risks from easy policy – BOJ Ishida
Japan Industrial Production (YoY) up to 2% in June from previous -3.9%
Dominating themes in Asia - centered on JPY, AUD, NZD
Today’s Asian session ended the data-dry spell seen earlier this week, with a slew of economic data releases across Asia. New Zealand’s building consents data kicked-off Asian data flow followed Japanese industrial output and the significant Australia’s building approvals data.
The AUD/USD pair completely ignored weaker building approvals print and remained well bid above 0.73 handle. As reported by Australian Bureau of Statistics (ABS), approvals for the construction of new homes fell 8.2% in June, which was worse than market expectations of a 0.9% fall. Over the 12 months to June, building approvals were up 8.6%.
While the Kiwi was relentlessly sold-off as divergent monetary policy outlook between the Fed and the RBNZ continued to weigh on the NZD. Moreover, markets were disappointed by the drop in NZ building consents data which further added to the losses in the bird. NZ residential building consents fell 4.1% in June as construction intentions in Canterbury tapered off, with the region's housing rebuild nearing a plateau.
On the other hand, the dollar-yen pair extended gains beyond 124 handle, aiming for the crucial resistance at 124.50 levels, following Fed’s talk up on the US economy as reflected by the FOMC statement while the latest comments from BOJ board member Ishida dragged the Japanese currency lower.
Most Asian markets were trading notably higher with Nikkei in Tokyo leading from the front, +1%. While Chinese markets were trading muted, erasing early gains. The Australian benchmark S&P/ASX 200 advanced 0.81%. Bucking the uptrend was South Korea’s Kospi down -0.50%.
Heading into Europe - centered on EUR, GBP
A data-busy EUR calendar ahead with German Prelim CPI and employment expected to be closely watched. While Spanish CPI and GDP figures are also due to be published during the European session.
Germany will release its preliminary inflation data for July, with CPI growth seen adding 0.2% on a monthly basis after a negative 0.1% result reported in June, while adding 0.3% annually, following 0.3% reported in June.
Germany's will also report labor data for July, with the unemployment rate expected to remain at 6.4%, after the same rate recorded in June.
Spain is expected to publish its GDP estimate for the second quarter. In the first quarter the Spanish economy grew 0.9% q/q, while adding 2.7% annually.
Looking ahead, the first look at second quarter GDP from the US will dominate the New York session tonight. The market wants to see a 2.5% rebound in economic growth, but investors will also be keen to see the annual revisions that will be announced along with the data on Thursday.
Consumer spending likely improved, as did spending on residential projects. Stockpiles are likely to be another positive contributor to the GDP.
Among others, US weekly jobless claims and goods trade balance will also be closely eyed to confirm the post-FOMC strength in the US dollar.
EUR/USD Technicals
The AceTrader team explained, " Euro's close below 1.1022 on Wednesday after an intra-day sharp sell-off from 1.1080 to 1.0967 in post-FOMC New York session signals up-move from July's 12-week trough at 1.0808 has made a temporary top at 1.1129 on Monday and consolidation with downside bias is seen for a retracement to 1.0940/50, however, reckon support at 1.0925 would hold and yield rebound later.”
“On the upside, a move back above 1.1080 would confirm correction over and bring re-test of 1.1129, break would extend aforesaid rise towards 1.1150/60."
Key headlines in Asia
Australia’s building approvals fall in June - worse than expectations
Watch out for accumulating risks from easy policy – BOJ Ishida
Japan Industrial Production (YoY) up to 2% in June from previous -3.9%
Dominating themes in Asia - centered on JPY, AUD, NZD
Today’s Asian session ended the data-dry spell seen earlier this week, with a slew of economic data releases across Asia. New Zealand’s building consents data kicked-off Asian data flow followed Japanese industrial output and the significant Australia’s building approvals data.
The AUD/USD pair completely ignored weaker building approvals print and remained well bid above 0.73 handle. As reported by Australian Bureau of Statistics (ABS), approvals for the construction of new homes fell 8.2% in June, which was worse than market expectations of a 0.9% fall. Over the 12 months to June, building approvals were up 8.6%.
While the Kiwi was relentlessly sold-off as divergent monetary policy outlook between the Fed and the RBNZ continued to weigh on the NZD. Moreover, markets were disappointed by the drop in NZ building consents data which further added to the losses in the bird. NZ residential building consents fell 4.1% in June as construction intentions in Canterbury tapered off, with the region's housing rebuild nearing a plateau.
On the other hand, the dollar-yen pair extended gains beyond 124 handle, aiming for the crucial resistance at 124.50 levels, following Fed’s talk up on the US economy as reflected by the FOMC statement while the latest comments from BOJ board member Ishida dragged the Japanese currency lower.
Most Asian markets were trading notably higher with Nikkei in Tokyo leading from the front, +1%. While Chinese markets were trading muted, erasing early gains. The Australian benchmark S&P/ASX 200 advanced 0.81%. Bucking the uptrend was South Korea’s Kospi down -0.50%.
Heading into Europe - centered on EUR, GBP
A data-busy EUR calendar ahead with German Prelim CPI and employment expected to be closely watched. While Spanish CPI and GDP figures are also due to be published during the European session.
Germany will release its preliminary inflation data for July, with CPI growth seen adding 0.2% on a monthly basis after a negative 0.1% result reported in June, while adding 0.3% annually, following 0.3% reported in June.
Germany's will also report labor data for July, with the unemployment rate expected to remain at 6.4%, after the same rate recorded in June.
Spain is expected to publish its GDP estimate for the second quarter. In the first quarter the Spanish economy grew 0.9% q/q, while adding 2.7% annually.
Looking ahead, the first look at second quarter GDP from the US will dominate the New York session tonight. The market wants to see a 2.5% rebound in economic growth, but investors will also be keen to see the annual revisions that will be announced along with the data on Thursday.
Consumer spending likely improved, as did spending on residential projects. Stockpiles are likely to be another positive contributor to the GDP.
Among others, US weekly jobless claims and goods trade balance will also be closely eyed to confirm the post-FOMC strength in the US dollar.
EUR/USD Technicals
The AceTrader team explained, " Euro's close below 1.1022 on Wednesday after an intra-day sharp sell-off from 1.1080 to 1.0967 in post-FOMC New York session signals up-move from July's 12-week trough at 1.0808 has made a temporary top at 1.1129 on Monday and consolidation with downside bias is seen for a retracement to 1.0940/50, however, reckon support at 1.0925 would hold and yield rebound later.”
“On the upside, a move back above 1.1080 would confirm correction over and bring re-test of 1.1129, break would extend aforesaid rise towards 1.1150/60."