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. Mutual Funds & ETFs

    ETF Analysis: ProShares Ultra Nasdaq Biotechnology

    Find out information about the ProShares Ultra Nasdaq Biotechnology exchange-traded fund, and learn detailed analysis of its characteristics and suitability.
  2. Mutual Funds & ETFs

    ETF Analysis: Direxion Daily S&P Biotech Bull 3X

    Learn more about the Direxion Daily S&P Biotech Bull 3x exchange-traded fund, a new triple-leveraged ETF tracking biotechnology equities.
  3. Mutual Funds & ETFs

    ETF Analysis: First Trust Health Care AlphaDEX

    Learn more about the First Trust Health Care AlphaDEX exchange-traded fund, an indexed fund that uses an advanced stock selection methodology.
  4. Mutual Funds & ETFs

    ETF Analysis: PowerShares FTSE RAFI Emerging Mkts

    Learn more about the PowerShares FTSE RAFI Emerging Markets ETF, a fundamentally weighted fund that tracks emerging market equities.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares Cali AMT-Free Muni Bond

    Learn more about the iShares California AMT-Free Municipal Bond exchange-traded fund, a popular tax-advantaged ETF that dominates its category.
  6. Mutual Funds & ETFs

    ETF Analysis: SPDR S&P Emerging Markets Dividend

    Learn more about the SDPR S&P Emerging Markets Dividend Fund, a yield-focused exchange-traded fund tracking global emerging economies.
  7. Mutual Funds & ETFs

    ETF Analysis: First Trust Dow Jones Global Sel Div

    Find out about the First Trust Dow Jones Global Select Dividend Index Fund, and learn detailed information about characteristics and suitability of the fund.
  8. Mutual Funds & ETFs

    ETF Analysis: U.S 12 Month Natural Gas

    Learn about the United States 12 Month Natural Gas Fund, an exchange-traded fund that invests in 12-month futures contracts for natural gas.
  9. Mutual Funds & ETFs

    ETF Analysis: iShares Floating Rate Bond

    Explore detailed analysis and information of the iShares Floating Rate Bond ETF, and learn how to use this ETF as a defense against rising interest rates.
  10. Mutual Funds & ETFs

    ETF Analysis: ProShares UltraPro Short S&P500

    Find out information about the ProShares UltraPro Short S&P 500 exchange-traded fund, and learn detailed analysis of its characteristics and suitability.
RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
  3. Lion economies

    A nickname given to Africa's growing economies.
  4. Factor Investing

    An investment strategy in which securities are chosen based on ...
  5. Reverse Gold ETF

    Exchange traded funds that are designed to trade in a direction ...
  6. Investment Fund

    A supply of capital belonging to numerous investors that is used ...
RELATED FAQS
  1. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  2. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  3. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  4. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  5. Is there a situation in which wash trading is legal?

    Wash trading, the intentional practice of manipulating a stock's activity level to deceive other investors, is not a legal ... Read Full Answer >>
  6. Are there leveraged ETFs that follow the retail sector?

    There are many exchange-traded funds (ETFs) that track the retail sector or elements of the retail sector, and some of those ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!