Major pairs are still on vacation mode as dollar price action was subdued even as US equities posted modest gains while risk aversion supported lower-yielding currencies. There were no reports out of the US economy today while today has the CB consumer confidence index and the Richmond manufacturing index on tap as markets reopen. Analysts are expecting to see a rise from 107.1 to 108.9 for the former and an improvement from 4 to 5 for the latter.
EUR/USD continues to tread around the 1.0400 levels, GBP/USD dipped to new lows since last month but quickly recovered, USD/JPY is holding steady around the 117.35 level, and AUD/USD is down to .7180. USD/CAD is up to 1.3540 and NZD/USD is down to .6880.
Commodity currencies appear to be the weakest of the bunch as tensions in the Asian region, particularly between China and Taiwan, have dampened investor sentiment. Apart from that, concerns about Trump’s potential trade deal renegotiations are weighing on commodity prices. In Europe, the European Central Bank told Italian bank Monte dei Paschi that it needs 8.8 billion EUR to recapitalize, higher than the initial 5 billion EUR figure on concerns about lender liquidity.
Japanese reports disappoint
Economic reports printed from Japan earlier today all came in the red, signaling the need for the Bank of Japan to increase its stimulus efforts. In their previous policy statement, the central bank upgraded their growth outlook while keeping their QE program unchanged.
EUR/JPY is holding on to the 122.50 minor psychological level, GBP/JPY is pulling back to the 144.00 mark, AUD/JPY is testing support at 84.00, and NZD/JPY is down to 80.77.
Household spending sank 1.5% versus the projected 0.4% year-over-year decline while the unemployment rate increased from 3.0% to 3.1%. The Tokyo core CPI showed a 0.6% drop instead of the 0.4% dip in price levels while the national core CPI printed a 0.4% fall versus the projected 0.3% decline. The BOJ core CPI is still due and a 0.2% reading is eyed, lower than the earlier 0.3% uptick, while the housing starts report is projected to show a 9.6% gain, slower than the earlier 13.7% increase.
Japan is set to print its preliminary industrial production figure next and a 1.8% rebound is eyed after the previous flat reading. Retail sales data is due and a 0.9% year-over-year gain is expected. Most global exchanges are set to reopen today, although the UK and Canada are still on vacation mode.