Good morning from Hamburg and welcome to the Varengold Daily FX Report. Helped by robust shipments to Asia, Japan’s exports increased more than expected in July from a year before. There are concerns that Japan’s economy could be hurt by the lagging US economy and the expected decrease in the economy of their newest top customer, China, after the economic boost from the Olympics wears off.
The EUR/USD is up 0.3% on the day and hit a high of 1.4785. Oil and gold prices are climbing with EUR/USD as well. An ongoing break through the 1.4800 level would open possibilities for a test of the 1.50 level, but many analysts are saying that a recovery would follow an increase. The dollar index didn’t change significantly, and was flat on the day at 76.893, not far from its 8- month high of 77.413 earlier this week. Investors are waiting for some data about the health of major economies from Europe and the US.
A survey by the National Bank of New Zealand shows that the economy probably contracted in Q2 as high interest rates and increasing oil and food prices hit domestic demand. According to the GDP data, economic activity decreased by 0.5% in Q2.
Market review
The USD is down as some margin traders are attempting to trigger stops in the USD/JPY below 109.50 and in the EUR/USD over 1.4800. On the release of some key Japanese economic data such as exports, the USD/JPY fell to a low of 108.61, but has since rebounded up to 108.84 According to some traders, there is a near term resistance at 110 in USD/JPY and there could be long potential at 109.50. The recovery in crude oil over $115 a barrel leads investors to be careful with the USD.The EUR/USD is up 0.3% on the day and hit a high of 1.4785. Oil and gold prices are climbing with EUR/USD as well. An ongoing break through the 1.4800 level would open possibilities for a test of the 1.50 level, but many analysts are saying that a recovery would follow an increase. The dollar index didn’t change significantly, and was flat on the day at 76.893, not far from its 8- month high of 77.413 earlier this week. Investors are waiting for some data about the health of major economies from Europe and the US.
A survey by the National Bank of New Zealand shows that the economy probably contracted in Q2 as high interest rates and increasing oil and food prices hit domestic demand. According to the GDP data, economic activity decreased by 0.5% in Q2.
