Forex Daily Outlook: Mixed Australian CPI and Chinese manufacturing data

Written by: Violina Todorova
July 24, 2013 Wednesday July 24th:_

Today’s Asian morning saw the EUR/USD open at 1.3219, starting a downtick to a current intraday low at 1.3197.
The market will today pay close attention to the preliminary readings of Germany’s Manufacturing PMI and Services PMI, both for July and due to be released by Markit Economics at 08:28 BST.
Half an hour later come preliminary readings for July of Markit Manufacturing PMI, Markit PMI Composite and Markit Services PMI.

From the US, the preliminary reading of the Markit Manufacturing Purchasing Managers Index for July is due out at 13:58 BST, followed at 15:00 BST by New Home Sales for June m/m.
The euro firmed against the dollar yesterday, with the pair rising to a more than one-month high at 1.3237, following the Eurozone Consumer Confidence Index for July, an improvement to -17.4 points from -18.8 points in June and the best reading since the -16.8 in August 2011.

The greenback took support from a rise in USD-denominated 10-year bond yields, back above the 2.50 percent level, reaching 2.513.
The Johnson Redbook Index for the week ended 14 July 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.
Sterling started today’s Asian session slightly lower against the greenback, with the pair falling from its opening at 1.5370 to an intraday low so far at 1.5351.
The only UK update scheduled for today is the CBI Industrial Trends Survey – Orders for July m/m, due out at 11:00 BST.

The pair rose yesterday, to be close to a one-month high at 1.5390, following the release of the BBA Mortgage Approvals June numbers, showing that 37,300 new mortgages were approved last month, up from May’s 36,102 approvals but below expectations for 38,500.
The USD/JPY opened in Asian trading today at 99.49 and following the release of June trade data out of Japan has subsequently risen 29 pips to an intraday high so far at 99.78.
Today at 00:50 BST Japan’s Merchandise Trade Balance Total for June was released by the Ministry of Finance. The 12th straight month of deficits came out at ¥180.8 billion, albeit well down on the revision to – ¥996.4 billion in May.
Japan’s exports for June annualised rose 7.4 percent, missing expectations for a 10.3 percent rise and down from May’s 10.1 percent.
Imports climbed 11.8 percent in June y/y, less than the forecasts for a 13.6 percent rise, but up on May’s revised 10.1 percent.
The greenback opened against the Canadian dollar in today’s Asian session at 1.0289, starting an uptick to a current session high at 1.0311, for a 0.22 percent gain so far in the day.
In the absence of Canadian updates today, the pair’s movements will be mostly influenced by the US manufacturing PMI and New Home Sales, due for release later in the day.
Yesterday the quote fell to a 22-day low at 1.0275, shedding 0.60 percent on the day.
The CAD was supported by 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 AUD/USD started today at 0.9284 and within an hour of Asian trading had risen to an 18-day high at 0.9315, to be up 0.31 percent so far intraday. Following Australian and Chinese releases, the quote then retraced to a current intraday low at 0.9241.
Australia’s Q2 Consumer Price Index came out at 02:30 BST as a 2.4 percent year-on-year, in the lower half of the Reserve Bank of Australia’s two to three per cent target range and down slightly on Q1’s 2.5 percent.
On a quarterly basis, the CPI rose 0.4 percent in Q2, compared with a rise of 0.4 percent in the prior quarter and below expectations for a 0.5 percent rise.
The HSBC Flash China Manufacturing PMI, released at 02:45 BST today, registered its worst performance since last August, with a preliminary fall to 47.7 for this month, below expectations for a rise to 48.5 and down on June’s 48.2.

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