Daily FX Trading Update: RBA Minutes Released – July 21, 2015

Daily FX Trading Update: RBA Minutes Released - July 21, 2015

The US dollar had a mixed performance as it gave up some ground to the commodity currencies but advanced against the yen and franc. There have been no major reports released from the US at the start of the trading week and there are still no reports lined up today. Because of that, risk sentiment could push dollar pairs around, with the odds slightly in favor of the safe-haven dollar.

The euro continued to edge lower against most of its rivals, as traders didn’t seem to be too impressed by the latest developments in Greece. In addition, data from the euro zone came in weaker than expected, as Germany reported a 0.1% fall in producer prices versus the projected flat reading. Meanwhile, the euro zone current account balance showed a smaller than expected surplus of 18 billion EUR for May. There are no reports lined up from the region today.

The pound held on to its recent gains despite the lack of data from the UK yesterday. Today has the public sector net borrowing data on tap and this is expected to show a smaller deficit of 8.6 billion GBP compared to the previous 9.4 billion GBP figure, which would reflect a better financial picture for the economy.

The franc followed in the euro’s footsteps and sold off against most of its rivals since there were no reports to keep the currency afloat yesterday. Today has the Swiss trade balance on tap and it is expected to show a smaller surplus of 2.54 billion CHF compared to the previous 3.41 billion CHF figure.

The yen reacted mostly to its counter currencies, as Japanese banks were closed on a holiday yesterday. Today had the BOJ minutes on tap and the report showed that central bank officials are feeling upbeat about the increase in exports and the improvements in business activity. Risk flows could push yen pairs around for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)
The comdolls had a bit of a recovery early on, as traders probably booked profits off their short positions ahead of this week’s key events. The RBA minutes indicated that further AUD declines are both likely and necessary since commodity prices are falling and trade volumes are also weak. In Canada, the wholesale sales report churned out a weaker than expected 1.0% decline versus the estimated 0.1% uptick, setting the stage for a disappointing retail sales report later on. New Zealand credit card spending showed a 6.5% gain, weaker compared to the previous 7.2% increase.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.