The economic calendar during today's Asian session was pretty tight. The indicators of retail sales in the 2nd quarter from New Zealand and inflation data for July from Japan provided the direction of national currencies of these countries.
The economic calendar during today's Asian session was pretty tight. The indicators of retail sales in the 2nd quarter from New Zealand and inflation data for July from Japan provided the direction of national currencies of these countries.
In addition to numbers, the focus of the market is gradually shifting to a symposium in Jackson Hole and the planned speech by Fed Chairman Powell. Markets continue to set forecasts on further rate cuts despite recent FOMC meeting minutes.
New Zealand retail sales grew by only 0.2% in the 2nd quarter compared to the previous quarter, down from 0.7% in the 1st quarter. Economists had forecast growth of 0.1%.
Retail trade in electronics increased by 5% for this quarter after rising 0.3% in the first quarter. Supermarkets and grocery stores recorded the largest decline in the 2nd quarter, by 0.9%. In the 1st quarter, sales grew by 0.4%.
Given the impact of changes in fuel prices, total retail sales were up 0.7% in the quarter, after rising 0.1% in the first quarter.
The New Zealand dollar fell from $ 0.63693 to $ 0.63690 after the publication of data. At the time of writing, the Kiwi partially won back the loss, rising to $ 0.6384.
In Japan, annual inflation in July fell from 0.7% to 0.5%, according to the Ministry of Internal Affairs and Communications. Economists had forecast inflation at 0.5%. The annual core inflation rate in July remained stable at 0.6%, which also corresponded to the forecast.
The Japanese yen rose from 106.446 to 106.470 yen after the publication of the statistical release.
The key driving force of the day will be the speech of Fed Chairman Powell at the Jackson Hole Symposium. Following the FOMC meeting minutes published Wednesday, investors need some clarity about what to expect from the US regulator in the near future.
Any hint that the Fed plans to keep rates stable for the remainder of the year could lead to short-term volatility of the US currency and lower riskier assets.
Powell is likely to want to avoid launching markets in a panic mode and may offer support for rate cuts with reservations.
US President Trump will almost certainly follow Powell’s planned speech. It's Friday, so Trump's Twitter account is likely to be more active than usual. Any emotional statements by the American leader can have a short-term effect on the behavior of the dollar.
At the time of writing, the dollar index fell by 0.02% to 98.19. The EURUSD pair is trading at 1.1071, where the single European currency is trading lower.
Forex blog >
USDCHF: Buy. Entry point – 0, 9849. Take profit – 1, 9866. Stop Loss – 0, 9820.
AUDUSD: Sell. Entry point – 0, 6757. Take profit – 0, 6743. Stop Loss – 0, 6782.
USDCAD: Buy. Entry point – 1, 3314. Take Profit – 1, 3333. Stop Loss – 1, 3281.
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