Weaker than expected economic data from the US forced the Greenback to retreat against the Japanese yen, as bond yields dipped as well. Pending home sales sank by 2.5% instead of posting the projected 0.6% gain. However, the dollar still managed to retain its lead against the European currencies and the comdolls, partly due to the persistent risk-off vibes in the financial markets.
USD/JPY broke below the 117.00 handle to a low of 116.68, EUR/USD dipped to 1.0409 then reached a high of 1.0440 later in the day, GBP/USD is up to 1.2240, USD/CHF is at 1.0275, AUD/USD is at .7195, and USD/CAD is at 1.3550.
Initial jobless claims data is due today and it could show a 277K figure, higher than the earlier 275K reading. Goods trade balance and preliminary wholesale inventories reports are also lined up, providing clues on how the trade balance and consumer spending figures might turn out later on.
UK data also disappoints, GBP dips
UK data also missed expectations as the BBA mortgage approvals report printed a 40.7K figure versus the projected rise from 40.8K to 41.6K. This signals that housing demand may be slowing as property speculators or residents are paring home-buying activity in light of Brexit issues.
GBP/JPY is down to 142.98, EUR/GBP is up to .8525, GBP/AUD is testing the 1.7000 major psychological level, and GBP/CAD is at 1.6570. Nationwide HPI is due next and a 0.2% uptick in house prices is eyed, slightly stronger compared to the earlier 0.1% rise. For the rest of Europe, data on private loans is due, along with M3 money supply. The Italian bond auction is also set to take place and this could shed more light on the country’s finances and investor sentiment.
Commodity currencies on the back foot
Risk aversion seems to be dampening demand for the commodity currencies, which caved against the dollar and the yen. US crude oil inventories data is due and a draw of 1.3 million barrels is expected, likely giving the commodity and the positively-correlated Canadian dollar some support. Australia will print its private sector credit data and likely show a 0.5% uptick.
AUD/JPY is testing support at the 84.00 mark, NZD/JPY is down to 80.82, CAD/JPY is trading at 86.25, EUR/AUD is holding on to the 1.4500 handle, EUR/NZD is up to 1.5072, AUD/CAD is at .9750, and NZD/CAD is at .9370.