Market Drivers for June 14, 2013
BPJ Minutes cause more turbulence in USD/JPY in Asia
Nikkei 1.94% Europe 0.58%
Oil $96.72/bbl
Gold $1382/oz.

Europe and Asia:
JPY BOJ May Meeting Minutes
NZD Business NZ Performance of Manufacturing Index 59.2 vs. 55.2
EUR Euro-Zone CPI
EUR Euro-Zone Employment

North America:
USD PPI 8:30
USD Current Account Balance 8:30
USD Industrial Production 9:15
USD Manufacturing (SIC) Production 9:15
USD U. of Michigan Confidence 9:55

It been a quiet and lackluster night of trade on the final day of the week in the currency market with high beta FX giving up some ground after hitting key resistance points in yesterday’s fevered North American session. Both the euro and cable were lower in early European dealing on profit taking after EUR/USD failed to clear the 1.3400 mark while cable could not hold the 1.5700 figure.

The economic news has been very sparse tonight with only European CPI and EU Employment change on the docket. The inflation data come in as expected at 1.4% vs. 1.4% eyed while the employment change declined by -0.5% versus -.0.2% forecast. The news was less than inspiring for euro longs and the pair dribbled towards the 1.3300 figure in morning dealing.

Much of this week’s gains in EUR/USD have been driven by nothing more than momentum, so it is not surprising to see the pair retreat in today’s session as end of week profit taking weighs on the pair.

The eco calendar does not get much more exciting in North American trade with only the U of M survey, IP and TICS on the docket. The U of M consumer sentiment survey may have the most impact on trade as traders look for any signs of weakness in demand. The number is expected to improve slightly to 84.9 versus 85.5 the month prior, and given the uptick in Retail Sales chances are good that consumer sentiment will continue to rise.

If the data does beat to the upside – it should provide further fuel to the dollar rally and push EUR/USD below the 1.3300 level and cable below the 1.5600 figure while at the same time keeping USD/JPY relatively well supported at 95.00. Earlier in Asian session USD/JPY once again dipped below 94.50 as the release of the BOJ minutes caused yet more turbulence in the pair.

The BOJ discussion of the volatility in JGBs roiled the FX market, but USD/JPY quickly found support and stabilized. As we have been stating for the past several days the pair likely to find some interest underneath the 95.00 level from longer term investment accounts and that’s why the 93.00-95.00 should provide some stability in the near term.

On a personal note, I will be off on a business trip next week, so there will be no European session updates until June 24th. Let’s hope the markets remain relatively calm until I come back..

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