DailyFX.com -

Talking Points:

  • NZ Dollar Falls on CPI Miss, Aussie Dollar Down After Chinese GDP
  • British Pound May Not Find Direction in June’s Jobless Claims Data
  • US Dollar Eyes Yellen Testimony for Direction Guidance Once Again

The New Zealand Dollar underperformed in overnight trade, sliding as much as 0.7 percent on average against its leading counterparts. The move followed softer-than-expected CPI figures for the second quarter. The baseline year-on-year inflation rate registered at 1.6 percent, falling short of consensus forecasts calling for a 1.8 percent result. That seemingly undermined RBNZ rate hike expectations, with the slide in the Kiwi tracking a parallel move lower in the New Zealand’s benchmark 10-year bond yield.

The Australian Dollar likewise traded lower, losing as much as 0.24 percent against the majors. Curiously, the move followed an upbeat set of Chinese GDP figures. Output grew 2.0 percent in the second quarter, topping bets calling for a 1.8 percent increase. Supportive Chinese data might have been expected to boost the Aussie considering the East Asian giant is Australia’s top trading partner, meaning firming performance there bodes for the latter country’s pivotal export sector.

The newswires chalked up this apparent disparity to concerns that the Chinese economy’s recovery was unsustainable, suggesting seemingly sharp credit expansion rather than hard growth is behind the rosy headline GDP reading. Fading stimulus expansion bets were likewise cited, with investors apparently worried that the second-quarter data set will discourage further expansionary policy. Needless to say, it is all but impossible to tell with absolute certainty why the markets were unimpressed and the Aussie fell. In any case, we remain short AUDUSD.

June’s UK Jobless Claims figures headline the economic calendar in European hours. Expectations call for a 27,000 drop in new applications for unemployment benefits, which would mark the smallest drawdown in 13 months. Absent a dramatic deviation from expectations, the outcome may pass with little fanfare considering its relatively limited implications for BOE monetary policy bets and thereby for the British Pound. Meanwhile, technical positioning warns GBPUSD may be carving out a top below the 1.72 figure.

The spotlight then shifts to US policy concerns as Fed Chair Janet Yellen testifies before Congress for a second day, this time appearing before the House of Representatives having talked to the Senate yesterday. The central bank chief’s prepared remarks are likely to sound familiar and offer little impetus for volatility. The Q&A session that follows might produce some fireworks if lawmakers manage to squeeze out anything about the likely timing of interest rate hikes however, prompting a response from the US Dollar.

New to FX? START HERE!

Asia Session

GMT

CCY

EVENT

ACT

EXP

PREV

22:45

NZD

Consumer Prices Index (YoY) (2Q)

1.6%

1.8%

1.5%

22:45

NZD

Consumer Prices Index (QoQ) (2Q)

0.3%

0.4%

0.3%

0:30

AUD

Westpac Leading Index (MoM) (JUN)

0.1%

-

0.1%

2:00

CNY

GDP (QoQ) (2Q)

2.0%

1.8%

1.5%

2:00

CNY

GDP (YoY) (2Q)

7.5%

7.4%

7.4%

2:00

CNY

GDP YTD (YoY) (2Q)

7.4%

7.4%

7.4%

2:00

CNY

Retail Sales (YoY) (JUN)

12.4%

12.5%

12.5%

2:00

CNY

Retail Sales YTD (YoY) (JUN)

12.1%

12.2%

12.1%

2:00

CNY

Industrial Production (YoY) (JUN)

9.2%

9.0%

8.8%

2:00

CNY

Industrial Production YTD (YoY) (JUN)

8.8%

8.8%

8.7%

2:00

CNY

Fixed Assets Ex Rural YTD (YoY) (JUN)

17.3%

17.2%

17.2%

European Session

GMT

CCY

EVENT

EXP

PREV

IMPACT

8:30

GBP

Jobless Claims Change (JUN)

-27.0K

-27.4K

High

8:30

GBP

Claimant Count Rate (JUN)

3.1%

3.2%

Medium

8:30

GBP

ILO Unemployment Rate (3Mths) (MAY)

6.5%

6.6%

Medium

8:30

GBP

Employment Change (3M/3M) (MAY)

243K

345K

Low

8:30

GBP

Avg Weekly Earnings (3M/(YoY) (MAY)

0.5%

0.7%

Low

8:30

GBP

Weekly Earnings ex Bonus (3M/(YoY) (MAY)

0.8%

0.9%

Low

9:00

EUR

Euro-Zone Trade Balance (€) (MAY)

16.5B

15.7B

Low

9:00

EUR

Euro-Zone Trade Balance s.a. (€) (MAY)

16.0B

15.8B

Low

9:00

CHF

ZEW Survey (Expectations) (JUL)

-

4.8

Medium

Critical Levels

CCY

Supp 3

Supp 2

Supp 1

Pivot Point

Res 1

Res 2

Res 3

EURUSD

1.3454

1.3520

1.3544

1.3586

1.3610

1.3652

1.3718

GBPUSD

1.6868

1.7000

1.7072

1.7132

1.7204

1.7264

1.7396

Related Articles
  1. Chart Advisor

    How Are You Trading The Breakdown In Growth Stocks? (VOOG, IWF)

    Based on the charts of these two ETFs, bearish traders will start turning their attention to growth stocks.
  2. Mutual Funds & ETFs

    Pimco’s Top Funds for Retirement Income

    Once you're living off the money you've saved for retirement, is it invested in the right assets? Here are some from PIMCO that may be good options.
  3. Chart Advisor

    Watch This ETF For Signs Of A Reversal (BCX)

    Trying to determine if the commodity markets are ready for a bounce? Take a look at the analysis of this ETF to find out if now is the time to buy.
  4. Mutual Funds & ETFs

    ETFs Can Be Safe Investments, If Used Correctly

    Learn about how ETFs can be a safe investment option if you know which funds to choose, including the basics of both indexed and leveraged ETFs.
  5. Mutual Funds & ETFs

    The Top 5 Large Cap Core ETFs for 2016 (VUG, SPLV)

    Look out for these five ETFs in 2016, and learn why investors should closely watch how the Federal Reserve moves heading into the new year.
  6. Economics

    India: Why it Might Pay to Be Bullish Right Now

    Many investors are bullish on India for all the right reasons. Does it present an investing opportunity?
  7. Investing Basics

    Building My Portfolio with BlackRock ETFs and Mutual Funds (ITOT, IXUS)

    Find out how to construct the ideal investment portfolio utilizing BlackRock's tools, resources and its popular low-cost exchange-traded funds (ETFs).
  8. Investing

    3 Things About International Investing and Currency

    As world monetary policy continues to diverge rocking bottom on interest rates while the Fed raises them, expect currencies to continue their bumpy ride.
  9. Chart Advisor

    These 3 ETFs Suggest Commodities Are Headed Lower (COMT,CCX,DBC)

    The charts of these three exchange traded funds suggest that commodities are stuck in a downtrend and it doesn't look like it will reverse any time soon.
  10. Trading Strategies

    4 ETFs To Trade the Russian Ruble (RSX, ERUS)

    Discover which exchange-traded funds (ETFs) provide investors with the greatest exposure to the Russian ruble and learn about the risks that come with each.
RELATED FAQS
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  3. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  4. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  5. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
  6. Can mutual fund expense ratios be negative?

    Mutual fund expense ratios cannot be negative. An expense ratio is the sum total of all fees charged by an asset management ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center