The US dollar regained ground in recent trading, as risk aversion seemed to set in the financial markets. Commodity prices have been falling to multi-year lows, triggering flight to safety. US retail sales figures came in line with expectations of a 0.4% increase in core retail sales and a 0.6% gain in headline consumer spending. US PPI, industrial production and capacity utilization, as well as the preliminary UoM consumer sentiment figure are lined up for today and strong data could reinforce speculations of a Fed rate hike in September.
The euro continued to advance against most of its forex rivals when Greece moved on to secure its third bailout. Medium-tier data from the euro zone came in line with expectations when France showed a -0.4% CPI reading and Germany printed a 0.2% uptick in price levels. Preliminary GDP readings are lined up for today, as well as euro zone final CPI data.
The pound resumed its climb against its peers even though there were no major reports released from the UK. There are still no reports lined up from the UK today, leaving risk sentiment as the main driver of pound price action.
The franc showed another round of losses in recent trading when the Swiss PPI showed a worse than expected 0.3% decline in producer prices versus the projected 0.2% dip. This could keep the SNB on intervention watch in an effort to ward off deflationary pressures. There are no reports due from Switzerland today.
The yen took advantage of the run in risk aversion to advance against most of its currency counterparts. However, data from Japan was actually weaker than expected, with core machinery orders showing a 7.9% drop versus the projected 5.3% decline. There are no reports due from Japan today.
Commodity Currencies (AUD, NZD, CAD)
The comdolls suffered another round of losses yesterday when gold and oil fell to six-year lows. As it turns out, the yuan devaluation could mean weaker demand for both commodities in the local Chinese market, which might then weigh on prices. Data from New Zealand was weaker than expected, as the quarterly retail sales report showed a mere 0.1% uptick for both headline and core figures. Canadian manufacturing sales data is due today and a 2.3% increase is projected.
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