Daily Forex Outlook Monday 5 August 2013

on Aug 5, 2013

**iNVEZZ.com, Monday 5 August:**

Due out about now in Europe (between 10.00 and 11.00 BST) are the July Final Services PMIs for Spain, Italy, France and Germany in that order. Analysts haven’t been expecting any meaningful change for the ‘core’ countries though the recent growth momentum in the periphery is expected to persist. The Eurozone Final Services PMI for July, also due out before 11.00 BST, is expected to stay unchanged from the previous 49.6 and continue being in a state of contraction.

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SENTIX Investor Confidence for August is scheduled at 09.30 BST with analysts expecting a strong reading of -10.0 compared to the negative 12.6 figure in July.
Today the market for the EUR/USD will also want to factor in the Eurozone Retail Sales Index for July, due out at 10.00 BST. Analysts have been picking a decrease of 0.6 percent, significantly down from the previous growth of one percent.

The pair is trading at 1.3278 at the beginning of the European Session.
The Markit/CIPS Services Index for July is due out at 09.28 BST with expectations for a minor increase, of around 0.4 to 57.3.
The pair is currently hovering around 1.5290, slightly down on last week’s close of 1.5292
The Nikkei 225 opened in Asian trading today with a gap down, at 14,303.45 after last week’s close at 14,466.16, and has been consolidating through the Asian session to be down 1.44 percent at 14,285.04 so far intraday.

There have been no economic updates out of Japan today.
The yen has continued firming against the US dollar since Friday, with the USD/JPY flirting with daily lows at 98.35. Currently the pair is trading around 98.44 or 0.53 percent down for the day.
In the US, the July figure for ISM Non-Manufacturing PMI, also known as Services PMI, is due out at 15.00 BST today, with analysts forecasting expansion in the services industry to 53.2 points from June’s 52.2.

The Melbourne Institute Inflation Gauge for July m/m, released yesterday, logged 0.5 percent inflation versus the flat previous reading.
Australian Retail Sales for June m/m were today reported at zero percent change, falling short of May’s 0.2 percent growth, revised up from 0.1 points. Analysts had been expecting 0.4 percent growth and the June year is the fourth consecutive reading when the market consensus was higher than the actual figure. The number for June’s Retail Sales Ex Inflation m/m was also worse than the prior period’s rise of 2.2 percent (revised from 2.0), coming out flat and slightly beating the forecasted decline of 0.1 percent.
The AIG Services Index for June showed further contraction in the services sector during the month, with the index down to 39.4 from the prior period’s 41.5. This is the lowest reading since onset of the global financial crisis. In releasing the result, AIG noted that the Australian services industry hadn’t been in a state of contraction since February 2012.
The aussie has marginally weakened so far today, 0.03 percent down on the opening and trading at around 0.89. Tomorrow sees release of the Reserve Bank of Australia’s Interest Rate Decision, widely expected to decrease the cash rate to 2.5 percent from the current 2.75 points.
Today has been a bank holiday in New South Wales.
Dallas Fed president Richard Fisher is scheduled to hold a press conference at 16.45 BST and his words will be as closely monitored as those of James Bullard last Friday. The St. Louis Fed boss expressed the view that the Federal Reserve should not ‘taper’ on the premise that things will improve, but wait for actual evidence and more economic data. Bullard said he was optimistic about the improving US economy, but believed it needed to get stronger before the Fed starts reducing asset purchases.
The US dollar has eased 0.07 percent today against its Canadian peer, with the USD/CAD currently trading around 1.0386.
No news is due out of Canada today on account of the Civic Holiday, with all banks closed.
ANZ Commodity Prices for July m/m came out earlier today, beating the previous release with an increase of 0.6 percent versus the prior decline of 3.7 percent and helping the kiwi to recover to 0.7798 intraday from the Asian session’s low at 0.7737.
The NZD/USD is still negative 0.48 percent for the day after it opened the week with a gap down, at 0.7754 from Friday’s close of 0.7835.


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