TODAY ASTONISHGLY UPDATE IN FOREX MARKET BY SHREE MCX.COM

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UK Inflation, Trade Wars and the ECB to Drive the GBP, USD and the EUR

EURUSD

Earlier in the Day:

Key stats released through the Asian session this morning were on the heavier side, including May’s employment figures out of Australia, retail sales, May’s fixed asset Investment and industrial production figures out of China and finalized April industrial production figures out of Japan.

For the Aussie Dollar, the unemployment rate fell from 5.5% to 5.4% as the participation rate slipped from 65.6% to 65.5%, with total employment rising by just 12,000, as full employment fell by 20,600 in May, the uptick in employment numbers coming off the back of a 32,600 increase in part-time employment

The Aussie Dollar moved from $0.75710 to $0.75730 upon release of the figures by the ABS, before easing to $0.7563 at the time of writing, down 0.20% for the morning.

Out of China, some softer numbers hit risk appetite:

  • Fixed asset investments grew by 6.1% year-on-year in May, falling short of a forecasted and April 7%.
  • Industrial production rose by 6.8% year-on-year in May, falling short of a forecasted 6.9% and April 7% growth rate.
  • Retail Sales increased by 8.5% year-on-year in May, falling short of a forecasted 9.6% rise, whilst slowing from the 9.4% rise in April.

The Day Ahead:

For the EUR, stats through the morning include finalized May inflation figures out of Germany and France, though the main event will be the ECB’s monetary policy decision and the all-important press conference later in the day.

As things stand, the markets have taken a position, the general view being that Draghi will be delivering a more hawkish stance from a policy perspective, with an outline of when the QE program will be brought to an end. The hawkish sentiment comes at a tricky time for the EUR, with the Eurozone economy having faltered in the 1st quarter and the start of the 2nd, the threat of a trade war also continuing to loom large.

 

For the Pound, May retail sales figures are scheduled for release later this morning. Sentiment towards BoE monetary policy continues to be mixed, with private sector PMI numbers having showed a strong rebound in the 2nd quarter from the softer numbers in the 1st quarter, while April’s industrial and manufacturing production numbers released at the start of the week disappointed.

 

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