AUS - RBA Holds Rates Steady
We begin with some news from the Asian session. The Reserve Bank of Australia kept interest rates at 3% for a third month, as the country’s low interest rates and government handouts have bolstered consumer spending, helping Australia avoid a recession by growing in the 1st quarter. Still, the bank said with inflation low, there is still “some scope for further easing of monetary policy, if needed.”
AUD/JPY - Aussie Gives Up Earlier Gains as Risk Sentiment Turns
The Aussie-yen pair moved higher overnight reaching the 76.60 area prior to the NY open. But any sense of risk appetite from a rise in European stocks was doused in NY trading as both European and US stocks turned negative continuing a theme seen the last 3 sessions. The Aussie pared its gains and fell to test its low from yesterday. The change from high to low amounted to 180 pips.
GER - Factory Orders Surprise Forecasts
In the Euro-zone, German manufacturing orders rose 4.4%in May, which was the largest jump in orders in almost two years. The figure was much higher than expectations and increases the chances that the Euro-zone economy is on track for a gradual recovery.
EUR/USD - Euro Rises After Data, But Slides in NY
The German manufacturing news gave the Euro-Dollar a boost, sparking a rally in the Euro’s favor from a low near 1.3915 to a high near 1.4050. However, as we saw in our earlier pair, risk sentiment soured in NY trading, and the Euro gave up all of its gains, falling back to its intra-day low.
UK - Manufacturing Production Disappoints in May
In the UK, manufacturing production declined 0.5% in May, the first decline in three months. The data surprised forecasts, which were calling for a small increase. The data here, unlike in Germany, suggests that the UK manufacturing sector remains mired in the grips of its recession.
GBP/USD - Pound Pressured by Manufacturing Data and Risk Aversion
The weak UK production data pressured the Pound during the European trading session, and it stumbled lower as risk aversion swept in during the NY session. The pair’s rally yesterday following a steep fall, tested the level of support that has may have not turned to resistance.
USD/CAD - Loonie Gives Up Earlier Gains as Oil Prices and Stocks Slide
Commodity currencies had a tough time of it today as lower oil prices pressured oil shares, and new rules were being considered by the CFTC regarding speculators positions on commodities. The US Dollar Canadian Dollar pair showcased similar price action to some of the other pairs we have looked at. The pair hit an intra-day low near 1.1540 on the back of risk appetite during the European session. However, with the Dow Jones index falling 2% by the end of the day, the greenback rose 130 pips to retest its highs from yesterday.
Upcoming Releases
Tonight, the UK will release data on consumer confidence and retail prices. Japan meanwhile releases reports on machinery orders, bank lending and its current account. Australia finished off the Asian session with data on consumer sentiment and housing starts.
Overnight, Switzerland releases its unemployment rate, the Euro-zone posts revised figures for 1st quarter GDP and Germany posts its industrial production. Tomorrow, the US will release data on consumer credit.
