Investors positioned for global growth and stronger inflation
Ranges broke this forex trading week as investors positioned for global growth and stronger inflation, pushing gold and crude oil higher with the commodity dollars in tow, while ignoring warnings from central bankers regarding the weak and bumpy recovery expected.
Australia lost 15K jobs in August; a fall in the participation rate kept unemployment at 5.8%. September Westpac consumer confidence rose to 5.2%, NAB August business conditions to 4 and business confidence to 18, and August construction PMI to 42.4; however, July retail sales fell −1.0% m/m, home loans −2.0%, and investment lending −4.0%. AUD/USD surged 1.6% this week on Chinese data, surging through strong resistance at 0.8450 but stopped by 0.8655, closing at 0.8626.
In the Federal Reserve’s latest Beige Book, 11 of 12 districts reported economic conditions stabilising or firming. July consumer credit shrank a whopping US$21.6Bn and the trade balance widened to a deficit of US$32.0Bn. September UofM consumer confidence improved to 70.2 and initial jobless claims for the week ending 5 September eased to 550K.
Eurozone September Sentix investor confidence improved to −14.6. In Germany, July industrial production improved and the trade surplus widened, while August CPI hovered near zero. EUR/USD scored a fresh 2009 high and surged into the upper half of its bullish regression channel, closing at 1.4581 for a gain of 1.9%.
The BoE left rates at 0.5% and held their QE course steady. August PPI printed input 2.2% m/m, −7.5% y/y, output 0.2% m/m, −0.4% y/y, and output core 0.2% m/m, 0.7% y/y. August consumer confidence improved to 63 but the retail sales monitor fell −0.1%. The July visible trade deficit narrowed less than expected, to £6479Bn, while industrial production rose 0.5% m/m, −9.3% y/y. GBP/USD surged for a second week, climbing to close at 1.6668. EUR/GBP traded volatile but overall flat, closing at 0.8745.
The BoC left rates at 0.25%. July building permits fell −11.4%, July new housing price index rose 0.3% m/m, and August housing starts surged 150.4K. July international merchandise trade printed a deficit of CA$1.4Bn. USD/CAD rode the 1.0750 support level, closing at 1.0784. AUD/CAD pushed through last week’s resistance at 0.9275 then rode it as support, closing at 0.9302.
The RBNZ left rates at 2.5% and did not entirely remove the easing bias from the statement. The 2Q2009 terms of trade index fell −9.0% q/q, August card spending slowed to 0.2% m/m, and August house prices improved to −2.8% y/y. NZD/USD was the best performer amongst the majors, surging 2.9% to a new 2009 high before closing at 0.7058. AUD/NZD could not hold gains above 1.2400 and sank to close at 1.2211.
The second estimate of Japan’s 2Q2009 GDP slid to 0.6% q/q, 2.3% annualised. August consumer confidence printed 40.4, and the EcoWatchers survey printed 41.7 current, 44.0 outlook. The July BoP trade balance narrowed to ¥437.3Bn, the current account total to ¥1265.6Bn. July machine orders deteriorated to −9.3% m/m, −34.8% y/y, and machine tool orders −71.3% y/y. USD/JPY sank 2.5% on Japanese corporate repatriations, within a bearish channel drawn from 5 April, closing at 90.64. EUR/JPY lost 0.6% in the week, closing at 132.18, and AUD/JPY could not force through resistance at 79.60 and closed at 78.19.
Week ending 11 September 2009
Ranges broke this forex trading week as investors positioned for global growth and stronger inflation, pushing gold and crude oil higher with the commodity dollars in tow, while ignoring warnings from central bankers regarding the weak and bumpy recovery expected.
Australia lost 15K jobs in August; a fall in the participation rate kept unemployment at 5.8%. September Westpac consumer confidence rose to 5.2%, NAB August business conditions to 4 and business confidence to 18, and August construction PMI to 42.4; however, July retail sales fell −1.0% m/m, home loans −2.0%, and investment lending −4.0%. AUD/USD surged 1.6% this week on Chinese data, surging through strong resistance at 0.8450 but stopped by 0.8655, closing at 0.8626.
In the Federal Reserve’s latest Beige Book, 11 of 12 districts reported economic conditions stabilising or firming. July consumer credit shrank a whopping US$21.6Bn and the trade balance widened to a deficit of US$32.0Bn. September UofM consumer confidence improved to 70.2 and initial jobless claims for the week ending 5 September eased to 550K.
Eurozone September Sentix investor confidence improved to −14.6. In Germany, July industrial production improved and the trade surplus widened, while August CPI hovered near zero. EUR/USD scored a fresh 2009 high and surged into the upper half of its bullish regression channel, closing at 1.4581 for a gain of 1.9%.
The BoE left rates at 0.5% and held their QE course steady. August PPI printed input 2.2% m/m, −7.5% y/y, output 0.2% m/m, −0.4% y/y, and output core 0.2% m/m, 0.7% y/y. August consumer confidence improved to 63 but the retail sales monitor fell −0.1%. The July visible trade deficit narrowed less than expected, to £6479Bn, while industrial production rose 0.5% m/m, −9.3% y/y. GBP/USD surged for a second week, climbing to close at 1.6668. EUR/GBP traded volatile but overall flat, closing at 0.8745.
The BoC left rates at 0.25%. July building permits fell −11.4%, July new housing price index rose 0.3% m/m, and August housing starts surged 150.4K. July international merchandise trade printed a deficit of CA$1.4Bn. USD/CAD rode the 1.0750 support level, closing at 1.0784. AUD/CAD pushed through last week’s resistance at 0.9275 then rode it as support, closing at 0.9302.
The RBNZ left rates at 2.5% and did not entirely remove the easing bias from the statement. The 2Q2009 terms of trade index fell −9.0% q/q, August card spending slowed to 0.2% m/m, and August house prices improved to −2.8% y/y. NZD/USD was the best performer amongst the majors, surging 2.9% to a new 2009 high before closing at 0.7058. AUD/NZD could not hold gains above 1.2400 and sank to close at 1.2211.
The second estimate of Japan’s 2Q2009 GDP slid to 0.6% q/q, 2.3% annualised. August consumer confidence printed 40.4, and the EcoWatchers survey printed 41.7 current, 44.0 outlook. The July BoP trade balance narrowed to ¥437.3Bn, the current account total to ¥1265.6Bn. July machine orders deteriorated to −9.3% m/m, −34.8% y/y, and machine tool orders −71.3% y/y. USD/JPY sank 2.5% on Japanese corporate repatriations, within a bearish channel drawn from 5 April, closing at 90.64. EUR/JPY lost 0.6% in the week, closing at 132.18, and AUD/JPY could not force through resistance at 79.60 and closed at 78.19.
