The US Dollar was pushed lower once again as stronger than projected retail sales and industrial production out of China helped push risk higher. The risk appetite was short lived however once traders were able to digest the full bag of data and realize that poor bank lending rendered the compilation of data as mixed. The lackluster reaction of Chinese equities helped to reinforce the mindset that overall the data release could be deemed neutral until further investigation. Equities out of Shanghai eventually turned red, helping to pull other indexes in Asia close to flat on the day.
The initial wave of dollar selling pushed the EUR/USD to highs that were shy of the 1.5015 mark; subsequent market sentiment dropped that pair to 1.4975 levels entering London trading. The pound topped 1.6750 as it managed to elude the stink of yesterdays Fitch comments about the UK's potential risk of losing its AAA credit rating. The pair was choppy for the most part as it eventually settled near the bottom m of its range near 1.6710 by day's end.
The AUD/USD fell about 5 pips short of a new high of 0.9328, but as other markets turned, so did the Aussie Dollar, as it touched 0.9285 on a low. The AUD/USD has been front and center as of late as a primary benefactor of those traders looking to purchase riskier high yielding currencies.
USD/JPY was caught in a tug of war of sorts, with much better than expected core machinery orders (10.5% as opposed to projected 3.4%), at play against the weaker equities and poor Chinese bank lending. USD/JPY left early morning 89.85 levels in the dust to hit a 89.30 low before a reversal that is close to revisiting early session levels once again. This stencil was traced by the Yen crosses, which all saw significant selling pressure early before a late day turn around.
With bank holidays in both the US and Canada, expect trading to be spotty, however, the action resumes early in Asia with New Zealand retail sales followed by Australian employment data.
