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Australia Consumer Inflation Expectations up to 4.4% in June from previous 4.1%
398519 June 27, 2024 09:05 FXStreet Market News
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New Zealand ANZ Business Confidence dipped from previous 11.2Â to 6.1 in June
398517 June 27, 2024 09:02 FXStreet Market News
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If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
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USD/JPY retreats from 38-year peak, downside potential seems limited
398516 June 27, 2024 08:49 FXStreet Market News
- USD/JPY bulls opt to take some profits off the table amid intervention fears.
- The upbeat Japanese Retail Sales underpin the JPY and also exert pressure.
- The divergent BoJ-Fed policy could limit losses ahead of the US macro data.
The USD/JPY pair drifts lower during the Asian session on Thursday and erodes a part of the previous day’s strong gains to the 160.85-160.90 region, or its highest level since 1986. Spot prices currently trade around mid-160.00s, though any meaningful corrective decline seems elusive in the wake of a big US-Japan interest rate differential.Â
The Bank of Japan (BoJ) has been reluctant to provide a detailed plan for the reduction of bond purchases. In contrast, the recent hawkish comments from Federal Reserve (Fed) officials suggested that the US central bank is in no rush to start its rate-cutting cycle amid a still resilient economy. This, along with the underlying bullish tone across the global equity markets, might continue to undermine the safe-haven Japanese Yen (JPY) and act as a tailwind for the USD/JPY pair, warranting some caution for aggressive bearish traders.Â
Investors, meanwhile, remain on alert amid speculations that Japanese authorities might intervene in the markets to prop up the domestic currency. In fact, Japan’s Vice Finance Minister Masato Kanda reiterated that the government is prepared to take appropriate action if excessive currency fluctuations have a negative impact on the national economy. Adding to this, the upbeat Retail Sales data from Japan, which grew by the 3% YoY rate in May, lends some support to the JPY and prompts some profit-taking around the USD/JPY pair.Â
Traders now look to the US economic docket – featuring the release of the final Q1 GDP print, Durable Goods Orders, the usual Initial Weekly Jobless Claims and Pending Home Sales. This, along with the US Treasury bond yields, will influence the USD and drive the USD/JPY pair ahead of the Tokyo Core CPI on Friday. The focus, however, will remain glued to the US Personal Consumption Expenditures (PCE) Price Index, which is considered the Fed’s preferred inflation gauge and should provide a fresh impetus to the currency pair.
Levels to watch
Any subsequent slide is likely to attract some buying near the 160.00 psychological mark. This is followed by the 159.75 horizontal resistance breakpoint, now turned support, below which the USD/JPY pair could extend the corrective decline further towards the 159.00 round-figure mark. On the flip side, the multi-decade high, around the 160.85-160.90 region, could act as an immediate barrier. Some follow-through buying beyond the 161.00 mark will be seen as a fresh trigger for bullish traders and set the stage for an extension of a well-established uptrend.
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JPY strength picking up a bit during Asia-Pac so far
398514 June 27, 2024 08:12 Forexlive Latest News Market News
Catalysts remain thin but we are seeing some strength creep in the for JPY during the early Asia-Pac session so far.
I would doubt whether the hotter-than-expected retail sales data is to blame because the JPY very seldom takes this data series seriously.
Maybe some profit taking on longs as we trade above prior intervention levels? That would arguably make more sense.
In terms of weakness, the NZD leads the pack to on the downside, followed by the CAD.
Currency strength for asia pac so far
Japanese Retail Trade rises faster than expected in May, growing 3% versus the forecast 2%
398512 June 27, 2024 08:12 FXStreet Market News
Japan’s Retail Trade for the year ended in May, clocking in at 3% YoY versus the forecast hold at 2.0%. On the downside, the previous period’s print was revised down to 2.0% from the initial print of 2.4%.
Large Retailer Sales also increased in May, climbing to 4% YoY versus the previous month’s print of 3%.
Seasonally-adjusted Japanese Retail Trade revealed a front-loaded uptick in retail activity, with MoM large retailer sales clocking in at 1.7% in May compared to April’s 1.2%.
Economic Indicator
Retail Trade (YoY)
The Retail Trade data, released by the Ministry of Economy, Trade and Industry on a monthly basis, measures the total value of goods sold by retailers in Japan. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the YoY reading comparing sales values in the reference month with the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Market reaction
USD/JPY is slipping back i nearly Thursday trading, sliding to 160.50 after hitting a fresh 38-year peak on Wednesday. The pair clipped into an almost four-decade high at 160.87 this week, hitting bids that have remained unseen since 1986.
USD/JPY five minute chart
About Japanese Large Retailer Sales
The Large Retailer Sales data, released by the Ministry of Economy, Trade and Industry on a monthly basis, measures the total value of goods sold by large retailers in Japan. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of change in such sales. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
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EUR/USD pinned into low end below 1.0700 once again
398509 June 27, 2024 08:02 FXStreet Market News
- EUR/USD flubs the 1.0700 handle as bearish flows keep the Fiber pinned.
- Broad-market sentiment favored the Greenback on Wednesday as rate cut hopes dry up.
- Late-week key data prints to drive market momentum after an easy start to the week.
EUR/USD backslid into the 1.0680 region on Wednesday after the German GfK Consumer Confidence Survey for July ticked lower unexpectedly, and a lack of meaningful data during the American trading session left investors to chew on a cautious Federal Reserve (Fed) stance this week that saw rate cut bets shift lower.
Forex Today: Investors look at US PCE and French elections
German consumer confidence backslid to -21.8 for July, missing the forecast recovery to -18.9 from the previous monthÂ’s revised -21.0. Despite a slow and steady recovery in the German GfK Consumer Confidence Survey, WednesdayÂ’s downside print kicked the legs out from beneath the already-battered Euro.
US New Home Sales Change in May clocked in a -11.3% decline MoM on Wednesday, compared to the previous monthÂ’s 2.0%, revised sharply from the initial print of -4.7%.
Confidence survey releases continue through Thursday, with pan-EU Business Climate, Consumer Confidence, and Economic Sentiment Indicator data points all slated for release during the European market window. US Durable Goods Orders, revisions to first-quarter Gross Domestic Product (GDP), and weekly Initial Jobless Claims will follow during ThursdayÂ’s American trading session.
US QoQ GDP is expected to tick upward slightly to 1.4% from the initial print of 1.3%, while MayÂ’s US Durable Goods Orders are expected to print a -0.1% contraction compared to the previous monthÂ’s revised 0.6%. US Initial Jobless Claims for the week ended June 21 are expected to tick slightly lower to 236K from the previous 238K, but the figure is expected to come in above the four-week average of 232.75K.
US Core PCE Price Index inflation is expected to tick down YoY to 2.6% from the previous 2.8% as market participants hope for further signs of easing inflation to help push the Federal Reserve (Fed) towards rate cuts sooner rather than later.
The market’s confidence in a rate cut from the Federal Open Market Committee (FOMC) on September 18 has decreased. The probability of at least a quarter-point rate cut has decreased to around 60%, down from a peak of just above 70% last week, according to the CMEÂ’s FedWatch Tool.
Euro PRICE This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the New Zealand Dollar.
| Â | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| USD | Â | 0.13% | 0.19% | 0.53% | 0.11% | -0.05% | 0.64% | 0.36% |
| EUR | -0.13% | Â | 0.07% | 0.48% | 0.05% | -0.15% | 0.55% | 0.30% |
| GBP | -0.19% | -0.07% | Â | 0.34% | -0.05% | -0.23% | 0.48% | 0.23% |
| JPY | -0.53% | -0.48% | -0.34% | Â | -0.43% | -0.54% | 0.16% | -0.17% |
| CAD | -0.11% | -0.05% | 0.05% | 0.43% | Â | -0.14% | 0.53% | 0.28% |
| AUD | 0.05% | 0.15% | 0.23% | 0.54% | 0.14% | Â | 0.71% | 0.46% |
| NZD | -0.64% | -0.55% | -0.48% | -0.16% | -0.53% | -0.71% | Â | -0.26% |
| CHF | -0.36% | -0.30% | -0.23% | 0.17% | -0.28% | -0.46% | 0.26% | Â |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
EUR/USD technical outlook
Intraday action continues to get squeezed between the 200-hour Exponential Moving Average (EMA) at 1.0722 and a supply zone baked in below 1.0680. The Fiber is poised for a fresh decline into new near-term lows below 1.0660 if buyers arenÂ’t able to shake off a pattern of descending highs.
A rough descending channel is keeping daily candlesticks tilted towards the downside, and price action continues to waffle on the south side of the 200-day EMA at 1.0796. A last bearish push to 1.0600 could see a bullish bounce back towards chart territory north of 1.0700, while a continuation will see EUR/USD chalk in fresh lows for 2024.
EUR/USD hourly chart
EUR/USD daily chart
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECBÂ’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the EurozoneÂ’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
US Dollar advances ahead of GDP and PCE readings
398508 June 27, 2024 08:02 FXStreet Market News
- US Dollar extended recovery to Wednesday, reaching 106.00, its highest level since early May.
- Rising US Treasury yields lent support to the US currency.
- Week’s highlight remains JuneÂ’s PCE inflation data due on Friday.
WednesdayÂ’s session witnessed the US Dollar, as represented by the Dollar Index (DXY), climb to 106.00, a level last observed in early May.
The economic landscape in the US continues to portray resilience. A few signals of disinflation are noticeable, but it still holds on which makes the Federal Reserve (Fed) not fully embrace the easing cycle.
Daily digest market movers: US Dollar elevated by rising Treasury yields, eyes on PCE
- Wednesday’s standout data was the New Home Sales for May, which demonstrated a decline of about 11.3% to 619K units from 698K units in the prior release and beneath the 640K expected.
- Simultaneously, US Treasury yields are rising, with the 2, 5 and 10-year rates reported at 4.74%, 4.33%, and 4.31%, respectively.
- Expectations of a potential Fed rate cut in September continue to be high, odds from CME Fedwatch Tool are 60% for 25 bps cut.
- Thursday holds the Gross Domestic Product (GDP) revision for Q1, which is anticipated to hold steady at 1.3%.
- Friday’s significant event will still be the May Personal Consumption Expenditures (PCE) report, an inflation gauge favored by the Fed.
- Both headline and core PCE are projected to soften to 2.6% YoY, dropping from 2.7% and 2.8%, respectively, in April.
DXY technical analysis: Bullish momentum continues, index aims high
The technical outlook remains solidly optimistic with indicators firmly in the green. The Relative Strength Index (RSI) preserves a level above 50, while green bars are developing in the Moving Average Convergence Divergence (MACD), suggesting a gathering of strength among bulls. The progressive incline of these indicators demonstrating that the DXY may be preparing for additional upside.
Furthermore, the DXY Index maintains a standing position above the 20, 100 and 200-day Simple Moving Averages (SMAs), confirming a persistently positive outlook. With the Index reaching levels not seen since early May and with indicators showing a propensity for further increment, the DXY is oriented toward further gains. The 106.50 level is the next target for bulls.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nationÂ’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The countryÂ’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The countryÂ’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
Japan Large Retailer Sales up to 4% in May from previous 3%
398507 June 27, 2024 07:56 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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Japan Retail Trade s.a (MoM): 1.7% (May) vs 1.2%
398506 June 27, 2024 07:56 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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