Currency Analyst since 2010

July 16: Asian session

Investors pared bets on gains in the greenback before the Fed’s Chairman Ben Bernanke testifies to Congress this week.

EUR/USD edged a bit higher to $1.3070. Yesterday the single currency tested levels below $1.3000, but managed to close around $1.3060. Euro’s supported before German data forecast to show investor sentiment in Europe’s biggest economy improved. GBP/USD is just above $1.5100 after it tested $1.5027 yesterday. UK will release inflation data today at 08:30 GMT – CPI growth is expected to accelerate from 2.7% to 3.0%. US CPI will come out at 12:30 GMT.

USD/JPY is consolidating around 99.75, edging lower from the yesterday’s high of 100.50. Japan finance minister Aso repeated today that the weaker yen supports the exporters. USD/CHF keeps consolidating around 0.9475.

AUD/USD is a big mover in the Asian session, strengthening by 100 pips to $0.9190. The Reserve Bank of Australia’s meeting minutes, released today, showed the RBA sees the current policy appropriate with a scope for further easing. NZD/USD rose to $0.7840. New Zealand Q2 CPI rose by 0.2% q/q (vs. +0.3% expected) and by 0.7% y/y (vs. +0.8% expected). CPI remains below the RBNZ’s 1-3% target range. USD/CAD is little changed today, in the $1.0430 area after adding 40 pips yesterday.

Today’s article in China Securities Journal says that China can tolerate slower economic growth in order to get structural adjustment. It is also stated that the current levels of growth are ‘significantly’ above the growth floor. Meanwhile, Asian Development Bank has cut China 2013 forecast by 0.5% to 7.7% and 2014 forecast to 7.5%.

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