Good morning from Hamburg and welcome to the Varengold Daily FX Report. The weather in Hamburg has gotten better and it seems to be a sunny week after the wonderful sunrise this morning. However, we wish you a nice day and good luck in trading.
The USD/JPY reached a session high of 109.91, due to the Japanese importer buying before the Tokyo fix at 01:00 GMT. Some Japanese traders have been stepping in to sell at these highs, which has influenced it to recover back down to 109.85. The EUR/USD lost around 50 pips from its high to a low of 1.4756. According to some traders, the decrease in the EUR/USD is limited, as Euro zone would need more evidence of growth slowdown to lead to larger losses. Other traders say the EUR/USD may increase a bit more together with commodities as a near-term return from the high sell-off, but the loss is intact. However the dollar index jumped up a little to 76.822, as gold’s and crude oil’s gains are unchanged.
Market review
According to the Westpac Institutional Bank-Melbourne index, Australia’s economy is on the verge of going into a sharp economic recession in the next three to nine months, attributed to tense financial conditions, weak U.S. industrial production data, and diminishing household wealth. The annualized development of the index slowed to 2% in June from 2.4% in May. The low in June was the slowest pace since July 2001 and well under the long-standing trend of 3.9%. The slowdown supports the case for the RBA to reduce rates at the next policy meeting in September.The USD/JPY reached a session high of 109.91, due to the Japanese importer buying before the Tokyo fix at 01:00 GMT. Some Japanese traders have been stepping in to sell at these highs, which has influenced it to recover back down to 109.85. The EUR/USD lost around 50 pips from its high to a low of 1.4756. According to some traders, the decrease in the EUR/USD is limited, as Euro zone would need more evidence of growth slowdown to lead to larger losses. Other traders say the EUR/USD may increase a bit more together with commodities as a near-term return from the high sell-off, but the loss is intact. However the dollar index jumped up a little to 76.822, as gold’s and crude oil’s gains are unchanged.
