Kiwi Rebounds, NZ CPI Climbs; USD/DXY Flat, GBP Tumbles

Swiss Franc Soars to 2015 High; Yields Slump, Stocks Climb

Summary:

New Zealand’s Kiwi (NZD/USD) rebounded to 0.6317 from its New York close at 0.6275 after New Zealand’s Q2 CPI rose to 1.1% against expectations at 0.9%.

The Kiwi settled at 0.6297. Weighed by the lower Kiwi, the Australian Dollar eased to 0.6812 from 0.6837 yesterday.

The Swiss Franc (CHF) outperformed, soaring to an 8 year high against the US Dollar.

At the close of trade in New York, the USD/CHF pair was at 0.8577 (0.8620 yesterday).

Weighed by the lower Kiwi, the Australian Dollar eased to 0.6812 from its 0.6838 close yesterday, which was also the overnight high traded.

The AUD/USD pair slid to an overnight low at 0.6789.

Meanwhile, the Dollar Index (USD/DXY), a popular gauge of the Greenback’s value against a basket of 6 major currencies finished flat at 99.95.

US Headline Retail Sales slid to 0.2%, against forecasts at 0.5%.

Core Retail Sales dipped to 0.2% from 0.5% previously.

Sterling (GBP/USD) tumbled to 1.3037 from 1.3090.

The UK releases its Annual Consumer Price Index later today which is expected to ease to 8.2% from 8.7% previously.

The Euro (EUR/USD) was last at 1.1230, little changed from 1.1228 yesterday.

Against the Japanese Yen, the US Dollar (USD/JPY) settled at 138.84, little-changed from 138.80 yesterday.

Trading was volatile though, within the 137.67 to 139.13 range.

Bond yields were softer with the US 10-year rate down 4 basis points to 3.79%.

Germany’s 10-year Bund yield was last at 2.38% (2.51%).

The UK 10-year Gilt yield closed at 4.33% from 4.44%.

The Dollar was mixed against the Asian and Emerging Market currencies.

USD/CNH (Dollar-Offshore Chinese Yuan) rallied to 7.1925 from 7.1550.

However, the USD/THB (Dollar-Thai Baht) plummeted to 34.10 from 34.65.

USD/SGD edged up to 1.3220 against 1.3210 yesterday.

Against the Canadian Loonie, the US Dollar slid to 1.3168 (1.3215).

While Canada’s monthly headline CPI (m/m) eased to 0.1% from a previous 0.4%, Annual Median CPI jumped to 3.9% against forecasts at 3.7%.

Canadian Housing Starts climbed to 281,000, up from 200,000 previously.

US June Industrial Production eased to -0.5%, lower than forecasts at 0%.

US June Capacity Utilization fell to 78.9% from a downward revised 79.4% (79.6%).

• NZD/USD – The Kiwi, also known as the Flightless Bird, slid to a one-week low at 0.6275 before soaring to 0.63 In volatile trade, the Kiwi saw an overnight low at 0.6260. The overnight high traded was at 0.6837. New Zealand’s 10-year bond yield closed at 4.47% from 4.53% yesterday.
• USD/CHF – The US Dollar plummeted against the Swiss Franc as speculation grew that the Swiss National Bank would raise interest rates aimed at inflation. Overnight, the Dollar plummeted to 0.8543, lows not seen since January 2015.
• AUD/USD – The Aussie Battler dipped to 0.6812 from 0.6837 yesterday, weighed by the Kiwi’s lower close. In choppy conditions, the overnight low traded for the Aussie was at 0.6786 while the high recorded was at 0.6837.
• GBP/USD – Sterling fell to 1.3037, down from yesterday’s close at 1.3090. Overnight, the British Pound traded to a low at 1.3028. The overnight high traded was at 1.3126. The UK releases its Consumer Price Index later today which is expected to ease.

On the Lookout: 

Japan kicks off today’s economic data releases with its Reuters July Tankan Index (f/c 10 from a previous 8 – ACY Finlogix).

Australia releases its Westpac Bank June Leading Index (f/c -0.3% from 0.0% - ACY Finlogix).

The UK starts off European data with its UK June Inflation Rate (m/m f/c 0.4% from 0.7%; y/y f/c 8.2% from 8.7% - ACY Finlogix), UK Core Inflation Rate for June (m/m f/c 0.4% from 0.8%; y/y f/c 7.1% from 7.1% - ACY Finlogix).

The Eurozone follows with its Eurozone June Inflation Rate (m/m f/c 0.3% from 0%; y/y f/c 5.5% from 6.1% - ACY Finlogix), Eurozone June Core Inflation Rate (y/y f/c 5.4% from 5.3% - ACY Finlogix).

The US rounds up today’s data releases with its June Housing Starts (m/m f/c -10.2% from 21.7%; 1.48 million from 1.631 million - ACY Finlogix), US June Building Permits (m/m f/c - 2.3% from 5.6%; 1.49 million from 1.496 million- ACY Finlogix).

Trading Perspective:

The Dollar Index (USD/DXY) finished flat, with the Greenback mixed against its various rivals. The US releases its June Housing Starts and Building Permits later today.

Both numbers are expected to fall against previous data. This will put pressure on the Greenback today.

A surprise would be better than expected results. Until then, expect the Dollar to stay pressurized overall.

Watch those US treasury yields. They eased overnight. Further falls in US rates will pressurize the Greenback. 

• NZD/USD – Stronger than expected Q2 CPI saw the Kiwi lift to 0.6317 highs in early Asia before settling at 0.6297. Look for immediate resistance today at 0.6320 followed by 0.6350 to cap rallies. Immediate support can be found at 0.6260 (overnight low) followed by 0.6230. 
  Look for the Kiwi to trade a likely range today of 0.6260-0.6360. Trade the range.

(Source: Finlogix.com)

• AUD/USD – The Aussie Battler finished lower against the Greenback, settling at 0.6812 against yesterday’s 0.6837 open. Immediate support for the AUD/USD pair lies at 0.6790 followed by 0.6760. On the topside, look for immediate resistance at 0.6840 and 0.6870 to cap rallies. On the day, expect a likely trading range of 0.6785-0.6855 today. Look to buy dips.
• GBP/USD – Sterling slid to close at 1.3037 from yesterday’s 1.3090. On the day, look for immediate support at 1.3010 followed by 1.2980. Immediate resistance can be found at 1.3070 and 1.3100. Look for more choppy trade in this currency pair in a likely range today of 1.3010-1.3110. Trade the range, nice and wide.
• EUR/USD – The Euro finished little changed against the Greenback, closing at 1.1228 against yesterday’s 1.1230. Overnight, the high traded for the EUR/USD pair was 1.1276. The overnight low recorded was 1.1209. Look for the Euro to consolidate in a likely trading range today of 1.1205-1.1275. Prefer to sell Euro on rallies today.

Have a good Wednesday ahead. Happy trading all.

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