FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, reviews the day ahead, emphasizing the Chinese GDP figures and BoC rate call.

Key Quotes

China’s data slew at 12pm Syd/10am local dominates the calendar. Most eyes will of course be on GDP but the intra-quarter momentum will be worth noting in the June data, especially industrial production, where consensus is 9.0% y/y versus 8.8% in May. The median GDP forecast is 7.4% y/y, the same pace as Q1, with the vast majority of forecasts clustered within 7.2-7.6%. Local press suggestions yesterday of “faster” growth than in Q1 hints that 7.5% is a decent risk, which would be enough to provide at least modest support for AUD, NZD and Asian FX. Big picture however, Westpac’s baseline view is that growth doesn’t accelerate markedly until Q4 14, one factor behind our view that AUD/USD ends this year nearer 0.90 than 0.95.

It is another important day for the many GBP bulls, as the UK releases June claimant count unemployment (f/c -27k) and the May unemployment rate, seen edging down to 6.5% from 6.6%.

In the US, another busy data day features Jun PPI, May capital flows (TIC data) and Jun industrial production, where consensus is 0.3% m/m versus May’s 0.6% gain. Fed Chair Yellen delivers the second leg of her semi-annual testimony to Congress, this time to the House Financial Services Committee. She is almost certain to submit identical text and move straight to the Q&A. If anything, she should face even more grumpy questions from this Republican-chaired committee.

The Bank of Canada is fully expected to keep the policy rate at 1% where it has been since 2010. Thoughts of a tweak in the policy bias to a mild tightening tilt have been doused by the poor June jobs data.

Related Articles
  1. Forex Education

    Four Currencies Under the Spotlight in 2016

    With currencies having become the “tail that wags the dog,” in terms of their impact on the global economy, these four currencies will be under the spotlight in 2016.
  2. Forex Fundamentals

    These Currencies Are The Biggest Losers Of The Stock Downturn

    Here’s a list of the hardest-hit currencies amid the global stock market mayhem.
  3. Forex Strategies

    Will the Euro Continue to Rally? (EUO)

    The euro is rallying. Should investors chase this performance or is the real opportunity on the other side of the trade?
  4. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  5. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  6. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  7. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  8. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  9. Investing

    Financial News Comparison: Bloomberg Vs. Reuters (BAC, GOOG)

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  10. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
Trading Center