The euro was driven lower in the FX trading market by weaker than expected German and euro zone ZEW economic sentiment figures, although the shared currency managed to stage a strong recovery during the US session. German ZEW economic sentiment fell from 27.1 to 8.6, much lower than the estimated drop to 18.2. The euro zone ZEW economic sentiment figure slipped from 48.1 to 23.7, worse than the estimated drop to 41.3. Euro zone industrial production and German underlying inflation reports are due today.
The US dollar returned some of its recent FX trading gains when data came in weaker than expected. The JOLTS job openings report marked a 4.67M gain, lower than the estimated 4.74M increase. Meanwhile, the NFIB small business index climbed from 95.0 to 95.7, short of the expected 96.3 figure. For today, US headline and core retail sales data are up for release with the former estimated to show a 0.2% gain and the latter to print a 0.4% rise. Data on business inventories and crude oil inventories are also up for release today.
FX TRADING FUNDAMENTAL ANALYSIS
The pound made quite a recovery against its FX trading counterparts in recent trading as traders closed off their short positions ahead of today’s top-tier events. The UK will print its claimant count change report and possibly show a 29.7K drop in claimants and an improvement in the jobless rate from 6.5% to 6.4%. After that, the BOE will release its inflation report and possibly announce changes to its growth and inflation forecasts. Unchanged estimates could keep the pound supported while downgrades could lead to a deeper selloff.
The franc gave up ground again when FX trading data from the euro zone came in weak and there were no reports from Switzerland to give its currency any support. There are still no reports up for release today, which suggests that the franc might take its cue from risk sentiment or euro zone data.
The yen weakened against its FX trading counterparts as Japan kept releasing weak economic figures. Earlier today, the Q2 GDP reading came in line with expectations and marked a 1.7% contraction, bringing the annualized pace of growth down by 6.8%. It seems though that the reaction has been priced in already and the lack of data from Japan for the rest of the day could keep yen pairs in range or slowly grinding higher.
The comdolls took advantage of dollar weakness to regain ground in recent FX trading. Australia’s NAB business confidence showed an improvement from 8 to 11 while its HPI marked a 1.8% quarterly gain. House prices in New Zealand showed a 0.7% decline though, leading to Kiwi weakness during the Asian trading session. Earlier today, Australia’s Westpac consumer sentiment report marked a 3.8% increase and gave support to the Aussie. Chinese reports such as industrial production and retail sales are due today.
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