Previous session overview
After a strong performance in late Europe, the Dollar has weakened overnight. EURUSD rose to a high of 1.3940 so far after closing the day at 1.3860 in New York. Cable, which was temporarily trading well underneath of the psychological 1.60 level in Europe recovered to as high as 1.6125.
The biggest mover yesterday was USDJPY, which dipped to 91.70 yesterday, the lowest level in 5 months. In Asia this morning the pair turned and has presently recovered back to 93.30. As outlined earlier in the week, the move was mainly motivated through EURJPY and GBPJPY selling. GBPJPY which stood at 156 on Monday traded down nearly 10 big figures to reach a low of 146.90 in Europe before marking a strong return in Asia this morning. Presently at 150.10, the pair has risen more than 2% in just a few hours. EURJPY was slightly less volatile, but with a Monday-Wednesday drop from 134 down to 127 last night and subsequent bounce to 129.70 this morning, we still consider it as one of the more active pairs this week.
The Australian Dollar recovered somewhat from its collapse last night. In a sudden drop in European afternoon AUDUSD shed more than 2% from 0.79 down to 0.7725 on the back of the general Dollar strength. Overnight the AUD has recovered to 0.7820 but the outlook remains rather bearish.
Market expectation
The UK trade balance for the month of May is the first piece of big news today. It is forecast to improve only slightly over the previous months data deficit of some 7Bln GBP. Fear that the data will be weaker may halt any additional GBP gains till mid-morning.
The US will release its weekly jobless claims, the data is expected to remain improve over last week's 614k to 605k this week. Besides the data, a number of Fed officials are expected to hold speeches or testimonies.
We have had some interesting currency movements so far this week. The Yen-crosses took the spotlight, breaking key support levels on Tuesday. Despite the strong rebound, EURJPY and GBPJPY remain in negative territory and further selling may be close-by. This will weigh on the European currencies and we believe that Cable is especially vulnerable if it trades through 1.60 again.
Most important events of the day
| 9-Jul | Count. | Event | For | Unit | Imp. | Act. | Cons. | Prev. |
| 1:30 | AU | Employment | Jun | chg k | High | -20 | -1.7 | |
| 1:30 | AU | Unemployment | Jun | % rate | Med | 5.8 | 5.9 | 5.7 |
| 6:00 | DE | Current Account (nsa) | May | EURbn | Med | 3.7 | 3.7 | 5.5 |
| 6:00 | DE | Trade Balance | May | EURbn | Med | 9.4 | ||
| 6:00 | DE | CPI (F) | Jun | % m/m | High | 0.4 | 0.4 | |
| 6:00 | DE | CPI (F) | Jun | % y/y | High | 0.1 | 0.1 | 0.1 |
| 6:00 | DE | HICP (F) | Jun | % m/m | High | 0.4 | 0.4 | 0.4 |
| 6:00 | DE | HICP (F) | Jun | % y/y | High | |||
| 7:30 | NL | CPI | Jun | % m/m | Low | -0.4 | 0.1 | |
| 7:30 | NL | CPI | Jun | % y/y | Low | 1.5 | 1.6 | |
| 7:30 | SE | CPI | Jun | % y/y | Low | -0.7 | -0.4 | |
| 7:30 | SE | CPI | Jun | %m/m | Low | 0.2 | 0.1 | |
| 7:30 | SE | CPIX, Underlying | Jun | % y/y | Low | 1.2 | 1.3 | |
| 7:30 | SE | CPIX, Underlying | Jun | %m/m | Low | 0.2 | 0.3 | |
| 7:30 | DK | Current Account | May | DKK bn | Low | 4.3 | 2.9 | |
| 7:30 | DK | Trade Balance | May | DKK bn | Low | 3.3 | 3.1 | |
| 8:00 | EU | ECB release monthly bulletin | Low | |||||
| 8:30 | GB | Trade Balance, Non-EU | May | GBP bn | Low | -3.85 | -4.1 | |
| 8:30 | GB | Visible Trade Balance, World | May | GBP bn | High | -6.75 | -7 | |
| 11:00 | GB | BoE MPC interest rate announcement | Low | |||||
| 12:15 | CA | Housing starts | Jun | k | Med | 130 | 128.4 | |
| 12:30 | US | Initial Claims | 4-Jul | k | Med | 605 | 614 | |
| 13:00 | US | Fed Board Governor Duke gives remarks at the FDIC 2009 Interagency Minority Depository Institutions National conference in Chicago | Low | |||||
| 14:00 | US | Wholesale Inventories | May | %m/m | Low | -1 | -1.4 | |
| 14:00 | US | House Financial Services Committee holds a full committee hearing, "H.R. 3068, TARP for Main Street Act of 2009" | Low | |||||
| 15:00 | DE | FinMin Steinbrueck to speak in Frankfurt on the role of government in Germany's social market economy | Low | |||||
| 18:00 | US | Fed Vice Chairman Kohn to testify on Fed independence before the House Financial Services Domestic Monetary Policy Subcommittee | Low | |||||
| 18:30 | US | Minneapolis Fed President Stern, to give speech on "The Federal Reserve's response to the financial crisis, Too Big to Fail, and current economic conditions and prospects for recovery" at luncheon | Low | |||||
| 23:50 | JP | Domestic CGPI | Jun | % m/m | Low | -0.1 | -0.4 | |
| 23:50 | JP | Domestic CGPI | Jun | % y/y | Low | -6.4 | -5.4 |
