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Forex pairs in this Article » AUD/USD, GBP/USD, EUR/USD, USD/JPY
THE TAKEAWAY: China reports 2Q GDP in line with 7.5% expectations > US Advance Retail Sales misses expectations, coming in at +0.4%

Chinese 2Q GDP data was the most highly anticipated economic event today. The print came in at 7.5%, consistent with the 7.5% Bloomberg News survey expectation, but below 1Q’s 7.7% growth. Other noteworthy Chinese data include worse than expected June Industrial Production (+8.9% y/y actual; +9.1% Bloomberg News survey expected) and better than expected June Retail Sales (+13.3% y/y actual; +12.9% Bloomberg News survey expected). Investors will be more closely watching Chinese investment and consumption numbers as the government tries to shift China away from an investment-based to a more consumption-based economy.

Turning to US data, the most significant economic release today was June Advance Retail Sales, which came in at +0.4%, below the Bloomberg News survey expectations of +0.8%. This figure is in contrast to the generally strong consumption data we have seen over the last month. However, last Friday’s U. of Michigan Consumer Confidence data also came in below expectations (83.9 actual; 84.7 Bloomberg News survey expected). And despite the recent US data weakness, the USD continues its second day of increases. The Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) gains +28 (+0.25%) to $10892 at the time of writing.

Global markets are performing slightly bullish overall. Equities are higher from North America to Asia, including EM: S&P +0.11%; Euro Stoxx +0.44%; FTSE +0.63%; Hang Seng +0.12%; Sensex +0.38%; Bovespa +1.67% at the time of writing. Note that Japanese markets are closed today as the Japanese celebrate Marine Day.

Commodities are trading modestly negative with crude oil flat: WTI -0.01%; Brent +0.10%; LME Copper -0.66%; COMEX Copper -0.59%; Shanghai Copper -0.56% at the time of writing.

Turning to fixed income, US treasuries are slightly stronger while the spread between Eurozone core and peripheral bonds narrows. 10YR government bond yields trade as follows: US -2.4bps (-0.92%) to 2.558%; Germany +1.9bps (+1.21%) to 1.577%; Spain -5.6bps (-1.17%) to 4.709% at the time of writing.

AUDUSD 15-minute Chart: July 15, 2013

Dollar_Strength_Continues_Despite_Weak_US_Advance_Retail_Sales_Numbers_body_Picture_4.png, Dollar Strength Continues Despite Weak US Advance Retail Sales NumbersCharts Created using Marketscopeprepared by Kevin Jin

The AUDUSD rallied upon Sunday Open and through most of the Asian session before meeting resistance at $0.9120. The pair began to largely sell off shortly after London Open and declined roughly -50 pips before meeting support at .9050. The pair has made its way back up to .9100 shortly past London Close.

GBPUSD 15-minute Chart: July 15, 2013

Dollar_Strength_Continues_Despite_Weak_US_Advance_Retail_Sales_Numbers_body_Picture_3.png, Dollar Strength Continues Despite Weak US Advance Retail Sales NumbersCharts Created using Marketscopeprepared by Kevin Jin

The GBPUSD sold off heavily into London Open before finding support at $1.5050. The cable remained stagnant around that figure before finding life at New York Open. The poor US Advance Retail Sales figures spurred a rally at 12:30 GMT (8:30 EDT on chart above).

EURUSD 15-minute Chart: July 15, 2013

Dollar_Strength_Continues_Despite_Weak_US_Advance_Retail_Sales_Numbers_body_Picture_2.png, Dollar Strength Continues Despite Weak US Advance Retail Sales NumbersCharts Created using Marketscopeprepared by Kevin Jin

The EURUSD is trading slightly negative on the day, down -0.10% at the time of writing. The pair sold off through most of London trading before seeing a lift following the aforementioned poor US retail sales numbers.

USDJPY 15-minute Chart: July 15, 2013

Dollar_Strength_Continues_Despite_Weak_US_Advance_Retail_Sales_Numbers_body_Picture_1.png, Dollar Strength Continues Despite Weak US Advance Retail Sales NumbersCharts Created using Marketscopeprepared by Kevin Jin

The USDJPY soared throughout most of London trading and into New York Open, surpassing the ¥100.00 figure. The pair made it as high as 100.47 before declining roughly -50 pips in trading following the poor US retail sales data. The pair currently trades slightly below 100.00 at the time of writing.

--- Written by Kevin Jin, DailyFX Research

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