Market Drivers August 8, 2017
CNY Trade both imports and exports decline
German Trade beats
Nikkei -0.30% Dax -0.01%
Europe and Asia:
CNY Trade 46.7 B vs. 46B
EUR GE Trade 21.2B vs. 21B
CAD Housing Starts 8:30
It’s been another quiet night of trade in FX today with most of the majors barely moving 25 pips in slow, boring Asia session trade, but the dollar remained weak across the board with no sign that any counter trend rally was about to take place,
After being hammered for more than two months, the greenback appeared to stabilize last week aided by better than expected US NFP data and it looked as though some short covering rally may be in the offing this week, with medium term spec ready to book some profits in their dollar shorts. So far however, this dynamic failed to materialize. In fact the buck was weaker against all of its trading partners with USDJPY sliding towards the 110.50 level.
The data calendar remains very quiet with only Chinese Trade balance and German trade on the docket today. The Chinese data beat on the headline basis coming in at 46.6B versus 46B eyed but both exports and imports missed their mark suggesting that demand remains tepid and growth in H2 of this year is unlikely to accelerate much. In Germany the trade beat just slightly with 21.B versus 21B forecast. Neither report had much impact on the market.
With no US data on the docket, today trade could remain quiet for rest of the day, but if the weakness in the greenback continues the market may want to test the key support levels at 110.00 USDJPY and 1.1850 EURUSD. Any move towards those levels would be ominous for dollar longs as it would indicate that despite better economic data sentiment against the dollar remains bearish and further losses could be in the offing.