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29 Jul 2015
Kiwi flies in Asia on RBNZ Wheeler, FOMC – In Focus
FXStreet (Mumbai) - The New Zealand dollar rose sharply higher above 0.67 handle in the Asian session following RBNZ Governor Wheeler’s speech while the Aussie surrendered gains, although clinged to 0.73 barrier. The yen gained versus its US counterpart on the back of above estimates Japanese retail sales data.
Key headlines in Asia
Asian key events taken place - Rabobank
Japan retail sales: A touch better than expected 0.9% y/y in June
ECB approves Greek proposals for bourse reopening
Dominating themes in Asia - centered on JPY, AUD, NZD
Another data-light Asian session today, with RBNZ Wheeler’s speech and Japanese retail sales data emerging the two key events. The dollar-yen pair reversed a part of yesterday’s gains and fell in the red as the yen enjoyed the stronger than expected Japanese retail sales numbers while the greenback edged lower on profit-taking after the recent strength.
Retail sales in the world's third-largest economy rose an annual 0.9% in June, beating expectations for a 0.5% rise but still slowing sharply from a 3% spike in May. The report comes after the government recently downgraded its forecasts for consumer prices.
While the Kiwi remains well bid, although retraced from 0.6721 highs reached shortly after RBNZ Governor Wheeler’s speech delivered early today. Speaking to an ExportNZ/Tauranga Chamber of Commerce audience, RBNZ Governor Wheeler believed that further NZD depreciation was necessary for overall economic growth, although added that the economy currently isn’t weak enough that it requires more exuberant OCR cut expectations.
On the contrary, Aussie shaved-off gains and edged lower during mid-Asia as the greenback halted its descent and now trades muted against its major competitors.
Heading into Europe - centered on EUR, GBP
A data-quiet European session extends in to the second straight session with a few 2nd tier data which may have negligible impact across the FX board.
The main highlight remains the FOMC statement due to be published later in the New York session.
Its widely anticipated that the Federal Reserve (Fed) may not make a game-changing announcement when policymakers publish their latest decision. However, investors will closely await any clues which might shed more light into the timing of intensely discussed monetary tightening.
Markets believe that the economic picture, albeit better than in the first quarter, has not rebounded as strongly as projections called for this spring which has forced the Federal Open Market Committee (FOMC) to delay the start of rate normalization from June until September, at the earliest.
EUR/USD Technicals
The AceTrader team explained, "Despite euro's retreat from Monday's high of 1.1129 to 1.1022 yesterday, subsequent rebound suggests as long as 1.1019 (previous resistance, now support) holds, consolidation with upside bias remains.”
“Below 1.1019/22 would shift risk to downside for further weakness to 1.0968 (50% r of 1.0808-1.1129) but support at 1.0925 should remain intact."
Key headlines in Asia
Asian key events taken place - Rabobank
Japan retail sales: A touch better than expected 0.9% y/y in June
ECB approves Greek proposals for bourse reopening
Dominating themes in Asia - centered on JPY, AUD, NZD
Another data-light Asian session today, with RBNZ Wheeler’s speech and Japanese retail sales data emerging the two key events. The dollar-yen pair reversed a part of yesterday’s gains and fell in the red as the yen enjoyed the stronger than expected Japanese retail sales numbers while the greenback edged lower on profit-taking after the recent strength.
Retail sales in the world's third-largest economy rose an annual 0.9% in June, beating expectations for a 0.5% rise but still slowing sharply from a 3% spike in May. The report comes after the government recently downgraded its forecasts for consumer prices.
While the Kiwi remains well bid, although retraced from 0.6721 highs reached shortly after RBNZ Governor Wheeler’s speech delivered early today. Speaking to an ExportNZ/Tauranga Chamber of Commerce audience, RBNZ Governor Wheeler believed that further NZD depreciation was necessary for overall economic growth, although added that the economy currently isn’t weak enough that it requires more exuberant OCR cut expectations.
On the contrary, Aussie shaved-off gains and edged lower during mid-Asia as the greenback halted its descent and now trades muted against its major competitors.
Heading into Europe - centered on EUR, GBP
A data-quiet European session extends in to the second straight session with a few 2nd tier data which may have negligible impact across the FX board.
The main highlight remains the FOMC statement due to be published later in the New York session.
Its widely anticipated that the Federal Reserve (Fed) may not make a game-changing announcement when policymakers publish their latest decision. However, investors will closely await any clues which might shed more light into the timing of intensely discussed monetary tightening.
Markets believe that the economic picture, albeit better than in the first quarter, has not rebounded as strongly as projections called for this spring which has forced the Federal Open Market Committee (FOMC) to delay the start of rate normalization from June until September, at the earliest.
EUR/USD Technicals
The AceTrader team explained, "Despite euro's retreat from Monday's high of 1.1129 to 1.1022 yesterday, subsequent rebound suggests as long as 1.1019 (previous resistance, now support) holds, consolidation with upside bias remains.”
“Below 1.1019/22 would shift risk to downside for further weakness to 1.0968 (50% r of 1.0808-1.1129) but support at 1.0925 should remain intact."