DowntownForex

Forex Morning News: Dollar and Yen Weaken Overnight

By ForexDistrict- The Dollar and Yen weakened against its major counterparts as Asia stocks gained, spurring demand for higher yielding assets. Higher commodity prices and the strongest gain in Australian consumer confidence in 22 years, helped fuel stocks into positive territory for the first time in three days. Oil and gold prices maintained momentum, reaching above $70 and $960 in Asia, respectively.

Australian consumer sentiment recovered strongly posting a 12.7% jump to 100.1, according to the Westpac Banking Corp. This follows a 4.3% fall previously reported. As global equity markets rose, stabilizing economic data showed strength, and the Australian economy averted a technical recession, optimism among consumers posted the biggest gain in 22 years. Data suggests the RBA may leave rates unchanged in the near future, although they noted, in their previous meeting, that they will act if needed to spur further growth.

AUD/USD rose to as high as 0.8097 from 0.8010, while EUR/USD and GBP/USD rose above 1.41 and 1.64, respectively. The Yen fell against the Dollar rising from a 97.09 low to 97.72, EUR/JPY rose over one big figure from 1.3667 to 137.78.

Looking ahead…

Global trade will be in focus as readings from UK, Canada, and U.S. are set to be reported. Figures should prove imports and exports continue to fall, albeit at a slower pace.

In the European session, UK manufacturing and industrial production will be the key focus with markets expecting production to decline by 0.1%, respectively. The trade balance, which will be released alongside, is anticipated to show a deficit of -6.4B from -6.6B.

Canadian trade balance should report a surplus of 1.0B, while in the U.S., consensus looks at a 28.6B trade deficit. As oil prices continue to outperform, crude oil inventories are starting to have a stronger impact in the market. Last week prices fell on an unexpected build up in inventories and this week markets see a small uptick of 0.1M barrels.

Further, investors will place close attention to the FED’s Beige book of regional economic conditions, as it could provide clues on U.S. interest rates.

By Juan P. Bejarano. Edited by Graciela Gordillo

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