EUR: Just data from Italy worth watching, but it’s unlikely to cause too many issues for the single currency. Industrial production is seen flat in month on month terms, whilst GDP is the final release so not a risk for markets.
Idea of the Day
Last week was the worst for the dollar for 20 months (using the dollar index), with this marking a strong turn-around from the perception that the Fed was moving towards a position of being able to start ‘tapering’ the amount of monthly bond purchases.
But it was also about other currencies, most notably the yen, where the market appeared to lose some faith in the ability of the government to push through some of the reforms needed to kick-start the economy. This potentially sets us up for another volatile week of trading.
The theme that offered strong support to the dollar in May has been undermined, so this week will be a case of seeing which argument wins out (Fed ‘tapering’ or QE continuation), with the employment report on Friday not helping the market with this decision.
Latest FX News
USD: The dollar re-asserting itself in Asia trade. USDJPY crept higher, holding above the 98.00 level for the most part.
JPY: Small upward revision to final GDP data seen for Japan, rising 0.6% in Q1 vs. previous estimate of 0.4%. Data giving stocks a boost (Nikkei up nearly 4%) and softening the yen, USDJPY holding above the 98.00 level for the most part.
AUD: The Aussie once again making a new low for the year, having failed to hold up to the better dollar tone. Low on AUDUSD seen at 0.9394, with recovery seen thereafter, holding above the 94.00 level for the most part.
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