Forex: Daily Wrap up – USD gains against major peers on economic updates

on Jun 27, 2013

**EUR/USD** Thursday June 27th: The pair was trading higher today, recovering from a monthly low reached at 1.2984. However, despite plenty economic data releases today the quote has been trading in narrow channel without any sharp moves. Neither the euro nor the dollar have received enough support to pressure one another.
The German Statistics Office released an update on unemployment today at 09:00 BST. According to the report, the number of unemployed in May was 2.25 million, an annualised fall of 106,000 or 4.7 percent down. The total drop last month was reported at 24,000 less unemployed or 0.9 percent down from April. The adjusted unemployment rate in May was 5.3 percent.

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Also, the German Import Price Index has been updated today, showing a drop of 0.4 percent in May m/m, following the previous period’s fall of 1.4 percent. On an annual basis, the index fell by 2.9 percent in May against the previous month’s 3.2 percent fall.
The European Commission has also released a series of data today, including Eurozone Consumer Confidence, which improved to -18.8 in June, from -21.9 in May, meeting expectations, followed by the Eurozone Business Climate sentiment index, which rose to -0.68 in June, from -0.75 in May, below expectations for a reading at -0.65.

In addition, the Economic Sentiment Indicator grew to 91.3 from 89.5, above forecasts for improvement to 90.3. The fall in Industrial Confidence slowed down from -13 to -11.2 points, bettering expectations for a -12.4 decline. And finally, the Services Sentiment dropped to -9.5 from -9.2, missing expectations for a rise to -8.8.
The USD updates released today have been more influential, despite the impact not being seen immediately.

The value of the initial jobless claims for the week ended June 22 was 346,000, showing a decrease of 9,000 from the previous week’s revised figure of 355,000. The number for continuing jobless claims during the week ended June 15 has been reported at 2,965,000 against the revised level of 2,966,000.
Personal Spending value climbed 0.3 percent in May, reversing April’s 0.3 percent decline (the biggest drop in four years).

The annualised reading for May of the Core Personal Consumption Expenditure – Price Index remained unchanged at 1.1 percent.
The seasonally adjusted rate of US Personal Income for May rose to 0.5 percent, beating expectations for a 0.2 percent rise.
And finally, the National Association of Realtors reported that US Annual Pending Home Sales have increased by 12.1 percent in May, following a 10.3 percent rise in April. The Month-on-month value has grown by 6.7 percent in May, compared with the 0.5 percent drop the previous month and well above forecasts for +1 percent.
Following these US updates, the pair sank by almost 50 pips to 1.3006 so far in the NY session.
Friday will bring new readings of German retail sales and Consumer Price Index, followed by the US Chicago Purchasing Managers’ Index and Reuters/Michigan Consumer Sentiment Index for June.

The USD traded higher against the yen today, as Asian stocks gained with an almost three percent rise in the Nikkei index, during the Asian session. The demand for the yen has decreased, after concerns over the potential financial crunch in China have calmed down.
The yen didn’t receive much support today due to a lack of Japanese updates.
The Japanese Ministry of Economy, Trade and Industry has released the All Industry Activity Index, showing 0.4 percent growth in April versus a 0.3 decline in March.
Following the latest US economic updates today, the pair has rallied to 98.45 with continuing bullish signals.
In contrast, tomorrow the Asian session will be flooded with data releases.
The Nomura/ JMMA Manufacturing Purchasing Manager Index will signal the start of the Japanese economic releases in Friday’s Asian session, followed by Tokyo and National Consumer Price Indexes, Jobs/applicants ratio, Overall Household Spending, unemployment rate, industrial production and retail sales updates expected between midnight and 01:00 BST.
It has been an unlucky day for the pound with demand for the USD prevailing.
Sterling has fallen against it US peer on disappointing economic data, which has shown that Britain’s GDP for the first quarter of 2013 increased by an annualized 0.3 percent, revised down from the previously forecast 0.6 percent growth.
In addition, the UK current account deficit widened to a seasonally adjusted £14.5 million in the first quarter of 2013, from -£13.6 billion for the prior period. Economists had expected the deficit to narrow to £11.8 billion.
In contrast with yesterday’s highs around 1.5440, following the US updates today the quote has reached the 1.5200 barrier, threatening to break it.
The UK Nationwide Housing Prices and Index of Services will be updated tomorrow.
The Swiss Franc has been deprived of economic updates today with only the release of UBS Consumption Indicator for May, which remained unchanged at 1.46, a possible influence to sentiment.
The USD/CHF pair has been under the influence of US economic news today, rising to 0.9488 highs not seen in almost a month.
Tomorrow, the Swiss Institute for Business Cycle Research will release the KOF Leading Indicator, which measures future trends of the overall economic activity.
The Australian dollar has been roving between gains and losses the whole day with a daily high at 0.9737, reached late in the Asian session.
Today the National Australia Bank said that the Australian dollar’s value against the US dollar does not yet fully reflect the extent of the rise in US bond yields.
The USD has strengthened against its Australian peer, despite US updates not proving fully satisfying. The pair has fallen to 0.9260 so far in the NY session.
The Australian Industry Group index manufacturing performance for May will be released this Saturday.
The Canadian dollar has risen against the USD for the first time in nine days with a daily low at 1.0424, supported by rise in the price of crude oil futures and taking advantage of returning doubts that the Federal Reserve Bank of America will not scale back its monthly asset buying in September this year.
US economic indicators have been giving mixed signals, which has allowed the speculation on the Fed’s commitment to reduce QE to continue.
Following the US data released today the pair has risen to 1.0505 so far in American trading.
On Friday, the Canadian GDP monthly change will be updated, followed by Industrial Product Price and Raw Material Price Index.


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