The euro consolidated for the most part as traders refrained from taking any large FX trading positions ahead of today’s GDP releases. Germany is expected to report a 0.1% decline in growth while France might show a mere 0.1% uptick. Weaker than expected data could lead to a strong selloff for the euro, as the euro zone region is already expecting more weakness due to the Russian sanctions on food imports. The euro zone GDP might show a 0.1% expansion for the second quarter of the year.
The US dollar got back on its feet and was able to advance against its FX trading counterparts, despite weaker than expected US retail sales. The headline figure showed a flat reading for July while the core version of the report printed a mere 0.1% uptick. Business inventories and crude oil inventories came in line with expectations. For today, data on initial jobless claims and import prices are up for release.
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The pound suffered a sharp selloff in recent FX trading when the BOE inflation report turned out dovish. The jobs data came in better than expected, with the claimant count change reflecting a 33.6K drop in joblessness and the unemployment rate dropping from 6.5% to 6.4%. However, the average earnings report marked a 0.2% decline in wages, reviving concerns of economic slack. The BOE downgraded its Q3 growth forecast and wage growth forecasts while upgrading its annual GDP estimate.
The franc had a volatile FX trading day, although the ZEW economic expectations figure showed an improvement from 0.1 to 2.5. For today, Swiss PPI is up for release and it might show another flat reading. Weak data could lead to more losses for the franc while a stronger than expected report could push it higher. The franc might also be affected by euro zone top-tier data releases today.
The yen gave up ground to its FX trading counterparts as data from Japan continued to disappoint. Earlier today, the core machinery orders report showed a lower than estimated 8.8% increase versus the expected 15.5% annualized gain. No other reports are up for release from Japan but the downturn in data might lead traders to price in easing expectations from the BOJ and keep the yen weak.
Comdolls saw a bit of a rebound in recent FX trading despite shaky economic reports. Australia showed a 3.8% increase in its Westpac consumer sentiment reading then printed a mere 0.6% quarterly increase in its wage price index. Data from China was mostly weaker than expected, leading many to doubt that the world’s second largest economy is recovering. New Zealand quarterly retail sales came in slightly better than expected with a 1.2% gain in the headline and core figures. MI inflation expectations from Australia slipped from 3.8% to 3.1%. No other reports are due from the comdoll economies today.
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