Forex Daily Wrap Up: Euro at 1-month high on better than expected consumer confidence
_iNVEZZ.com Tuesday July 23th:_
The euro has remained firm against the US dollar today, following the latest Eurozone Consumer Confidence data, with the pair rising to a more than one-month high at 1.3228, after earlier hitting the intraday low so far at 1.3162.
The preliminary reading of the Eurozone Consumer Confidence Index for July came out at 15:00 BST today with a rise to its highest level in almost two years. Consumer confidence in the 17 countries using the euro jumped to -17.4 points in July from -18.8 points in June, beating expectations for a rise to -18.30 points. The reading is the best since August 2011, when it stood at -16.8.
The US dollar has been rising against key peers today, boosted by rising US T-Bill yields. According to Simon Smith, head of research at FxPro in London, the rise in USD-denominated 10-year bonds back above the 2.50 percent level during European trading, reaching 2.513 percent, had added firmer tone to the dollar, especially with peripheral bond yields holding relatively steady.
The US Redbook Index for the week ended July 14 came out at 13:55 BST today, closely followed by the Housing Price Index for May m/m.
As reported by Redbook Research, the Johnson Redbook Index was up 0.9 percent m/m, from the prior’s week 0.8 percent. The annualised reading was up 3.3 percent in the week, as against the prior week’s reading of three percent.
And the Federal Housing Finance Agency’s US Housing Price Index climbed 0.7 percent in May m/m, from April’s revised 0.5 percent rise.
Since the pair recorded its so far intraday high at 1.5379, during the day’s Asian session, sterling has been on a downward trajectory against the greenback. In New York trading so far, the quote has descended to an intraday low at 1.5325.
The British Bankers’ Association (BBA) released its Mortgage Approvals data for June earlier today, showing that 37,300 new mortgages were approved last month, up from May’s 36,102 approvals but below expectations for 38,500.
The greenback has been trading higher against the yen today, with the pair rising to an intraday high so far at 100.16.
The Japanese Cabinet Office released its latest monthly economic report at 02:40 BST today, containing the assertion that there are now tangible signs of a self-sustaining recovery in the Japanese economy, with improvement in all key areas, including exports, industrial production, corporate profits and business investment.
According to the report, recent pricing developments indicate an easing in deflationary effects. In the short term, the recovery is expected to be sustained by improving corporate profits translating into higher household income and business investment. The warning is sounded though, that slow-down in trading partner economies remains a risk for the recovery process.
The Asian session saw the USD/CAD at 1.0335, starting a downtick which has been continuing through the European session, with the pair falling to what remains an intraday low at 1.0284, down 0.51 percent so far.
The firming of the loonie against the greenback appears in part due to positive Canadian retail sales for May m/m, with the 1.9 percent increase well ahead of expectations for a 0.3 percent rise and April’s 0.2.
Excluding automobiles, the increase in May m/m was 1.2 percent, emphatically reversing April’s fall of 0.3 percent.
The aussie fell against the US dollar in early Asian trading today, with the pair rising to a one-week high at 0.9283, supported by the rising gold price and buoyant Asian share markets. So far in the New York session the pair has retraced to its continuing low for the day at 0.9220.
The spot price of gold finished in Sydney today at US$1,331.05, well up on yesterday’s US$1,317.70.
Australia is one of the largest gold producers in the world and as a commodity currency the AUD is sensitive to fluctuations in gold pricing.
Australia’s CPI for the second quarter of the year q/q and y/y is due to be released at 02:30 BST tomorrow. At the same time the Reserve Bank of Australia is due to publish its trimmed mean CPI, also for Q2 on an annual and a quarterly basis.
The Swiss franc started something of a rally against the US dollar late in today’s Asian trading, at which point the quote had descended to an intraday low so far at 0.9348. Since then, the greenback has firmed, taking the pair to a high for the day at 0.9405, for a gain of 57 pips so far.
In the absence of any economic updates from Switzerland until the end of the week, traders in the pair will have to be content with US releases.