Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 124.391 | EURUSD 1.10765 | AUDUSD 0.73718 | NZDUSD 0.6577 | USDCAD 1.30828 | USDCHF 0.97869 | GBPUSD 1.5587 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               124.51 | 124.38

EUR/USD             1.1082 | 1.1051

EUR/JPY               137.88 | 137.605

AUD/USD            0.7386 | 0.7357

NZD/USD             0.6605 | 0.6570

USD/CAD             1.3110 | 1.3079

EUR/CHF              1.0849 | 1.0837

USD/CHF             0.97945 | 0.9780

GBP/USD             1.5595 | 1.5574

EUR/GBP             0.7110 | 0.7095

For Today

• EUR: A very quiet session until late into the day, with the market opening around the 1.1080 levels and staying in the area before strong selling moved in as the market moved towards the grey hours with the Euro dropping down into the 1.1050’s triggering light stops through yesterday’s lows before running into light congestion. Downside bids around the current lows give way to an open range into the 1.1020 areas however, through this area the market again opens up for a test into further weak bids down through the 1.0950 areas and possible weak stops. Topside offers into the 1.1200 areas limit the upside for the moment and there would need to be some strong reasoning for the market to push through the level however, a push through the 1.1220-30 levels could see the market moving quickly through the 1.1300 level and opening up the ranges from June.
• GBP: Very quiet for the Cable with the market trading off the 1.5580 levels and pushing slowly towards the 1.5600 area however, late buying of USD’s in Asia saw the Cable pushing through into the mid 1.5570’s in very quiet trading before holding into the grey hours. Topside offers light until the 1.5650 areas where congestion is likely however, a push through the level will likely see weak stops and a run to the 1.5700 levels again with stronger offers to contend with. Downside bids seem to be along this 1.5580 level for the moment which is an unusual area for the Cable however, a push through the 1.5560 will possibly open up the downside for a test to 1.5500 areas with possibly stronger bids available.
• JPY: USDJPY again trades very quietly moving from the opening around the 124.40 levels to push a little higher to above 124.50 before holding into the grey hours, yesterday’s Empire numbers in the states proved to be the most exciting moment however, with only housing numbers the chances for a strong movement are limited. Topside offers from the 124.60 levels increase in size the closer you move to the 125.00 levels and are likely to cap the market however, a break here will probably see large weak stops appearing and the market opening to a test through to the 125.30 areas and again stronger offers. Downside bids into the 124.00 level will see bids continuing until the market moves through the 123.70 areas and then possible stops appearing for a test lower however, the market is likely to again be contained until tomorrows FOMC minutes are released to give some idea of whether September is lift off or another wait and see.
• AUD: A 20 pip range for the most part and the RBA’s minutes were broadly comfortable with the current levels with the market seeing little reaction moving from the opening 0.7370 areas to trade to the 0.7385 before reversing and dipping back to the 0.7360 areas into the later part of the session. Topside light offers into the 0.7390-0.7400 areas before running into a stronger level around the 0.7440 levels with a possibility of stops appearing through the 0.7460 area before further offers into 75 cent. Downside bids are light with congestion around the 73 cent level; a push through the level will continue to see light bids before the market opens a little on a push through the 0.7250 areas.

Overnight News

CNY:

China’s Economic Growth May Remain Low, PBOC Adviser Says: News

PBOC’s Yuan Reference Rate Little Changed at 6.3966 a Dollar

China Banks Sold Net 174.3b Yuan of Forex for Clients in July

CNY/TWD:

Yuan Devaluation Has Limited Impact on Taiwan Exports: MNI

JPY:

Japan PM Abe’s Cabinet Approval Rises in Sankei, Yomiuri Polls

JPY/CNY:

Japan’s Abe to Meet Xi in China Sept. 3, Mainichi Says

Moody’s:

Moody’s Cuts U.S. 2015 Growth forecast to 2.4% from 2.8% in May

EUR:

Greece Needs Additional EU6.2b, Sueddeutsche Zeitung Reports

AUD:

RBA Says Accommodative Policy Still Appropriate, Weak A$ Helping

Australia ANZ Weekly Consumer Sentiment Rises 0.6% to 113.2

TRY:

Turkey Opposition Accuses AKP’s Celik of Manipulating Currency

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

08:30     GBP       CPI M/M Jul C -0.30% | P 0.00%

08:30     GBP       CPI Y/Y Jul C 0.00% | P 0.00%

08:30     GBP       Core CPI Y/Y Jul C 0.80% | P 0.80%

08:30     GBP       RPI M/M Jul C -0.10% | P 0.20%

08:30     GBP       RPI Y/Y Jul C 1.00% | P 1.00%

08:30     GBP       PPI Input M/M Jul C -2.00% | P -1.30%

08:30     GBP       PPI Input Y/Y Jul C -12.80% | P -12.60%

08:30     GBP       PPI Output M/M Jul C -0.10% | P 0.00%

08:30     GBP       PPI Output Y/Y Jul C -1.50% | P -1.50%

08:30     GBP       PPI Output Core M/M Jul C 0.00% | P 0.00%

08:30     GBP       PPI Output Core Y/Y Jul C 0.20% | P 0.10%

08:30     GBP       DCLG UK House Prices Y/Y Jun C 5.90% | P 5.70%

12:30     USD       Building Permits M/M Jul C -10.30% | P 7.40%

12:30     USD       Housing Starts M/M Jul C 0.50% | P 9.80%

12:30     USD       Building Permits Jul C 1.21M | P 1.34M

12:30    USD       Housing Starts Jul C 1.20M | P 1.17M

Harry Hindsight              

• EUR: A very quiet day with little data to help the market along, news that Germany passed the bailout plans for Greece albeit with the government seeing plenty of dissension in the ranks, the market opened unchanged from Friday and slowly traded lower through the Asian session from the opening levels to dip to the mid 1.1080’s before moving back to the starting areas as the market moved into the grey hours only to drop quickly on the London opening to the 1.1060’s taking out some light stops from early buyers, a decent Eurozone trade balance helped to chase the market back to those opening levels again and then the market held for the most part in a narrow range to the NYK session dropping back again to test the lows and the 1.1060 level before spending a long period from the close of London moving around the 1.1080 level to the close.
• GBP: Cable moved quietly in the Asian session trading around the 1.5650 areas before moving higher into the grey hours on the back of commentary by one of the MPC in the Guardian newspaper suggesting she would be the next one to vote for a rise, so that makes two. This saw the market testing into the 1.5680’s before London sellers sold into the rally and dropped the market back to the 1.5650 area just as quickly, the session then turned into a steadily falling Cable through into the NYK session, the close of London saw another strong bout of selling and the market moved quickly through the 1.5620 levels to trigger light stops through 1.5600 and then a quiet run to the close holding the 1.5580 areas in a tight range.
• JPY: Barely a 30 pip range throughout the day saw the USDJPY rise in the Asian session to the 124.45 levels from the opening 124.30 and then hold the 124.40 through Tokyo and into the grey hours, London were quick buyers taking the market to the 124.55 areas before the market moved into NYK and quickly reversed the gains trading back to the opening 124.25 areas before quietly rising again over the remainder of the day to the 124.40 level.
• AUD: The Oz like the rest traded in a very quiet range with the market trading around the 0.7365-80 areas through the Tokyo session, the move into the London session saw some light selling however, the lows of 0.7345 were eventually made into the NYK session were the earlier sellers were willing to take profit and turn the market slowly higher and a run to make the highs over the course of several hours to just below the 0.7390 areas before closing in line with the open.

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

GBP       Rightmove House Prices M/M Aug A -0.80% | P 0.10%

JPY         GDP Q/Q Q2 (P) A -0.40% | C -0.50% | P 1.00%

JPY         GDP Deflator Y/Y Q2 (P) A 1.60% | C 2.10% | P 3.40%

CHF        Retail Sales (Real) Y/Y Jun A -0.90% | C -0.60% | P -1.80%

EUR        Eurozone Trade Balance (EUR) Jun A 21.9B | C 19.3B | P 21.2B | R 21.3B

CAD       International Securities Transactions (CAD) Jun A 8.51B | C -5.95B | P -5.45B | R -5.46B

USD       Empire State Manufacturing Aug A -14.9 | C 5 | P 3.86

USD       NAHB Housing Market Index Aug A 61 | C 61 | P 60

USD       Net Long-term TIC Flows Jun A $103.1B | P $93.0B

Good Luck,

Andy

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