All of the foreign currencies futures but the euro and Swissy open with small gains in the US. The Japanese yen recovered, as calls from local politicians to weaken the currency are generally ignored by the Bank of Japan and the market. The Asia/Pacific stock markets closed mostly higher, the European bourses are lower despite strong Eurozone GDP data, while the gold/oil spread is edging lower on profit taking. The US stock indexes are lower in pre-open market. The US economic agenda features a wide bevy of reports: CPI, retail sales, University of Michigan confidence and business inventories.
The short-term outlook is sideways to slightly bearish for the European currencies, sideways for the yen and sideways to slightly bullish for the commodity currencies. The medium-term outlook is sideways for the European and commodity currencies, but it could turn bearish soon. My model is short on the Dow Jones CME FX$INDEX and on all the European and commodity currencies, and long yen.
This Analysis Is Based On My Books, As Follows:
“Trading in the Global Currency Markets” - Prentice Hall Press, 3rd edition 2007
Eurozone: The trade balance rose into surplus of EUR 2.4 billion in June from a deficit of EUR 3.3 billion in May.
Germany: GDP expanded 2.2% sequentially in the second quarter, its biggest growth since its 1991 reunification, from the upwardly revised 0.5% first quarter expansion.
France: GDP rose 0.6% in the second quarter and GDP growth for the first quarter was revised up to 0.2% from the 0.1% reported earlier.
Eurozone: GDP grew 1% sequentially in the second quarter, following a 0.2% rise in the first quarter.
France: Payroll employment increased 0.2% or 35,000 in the second quarter.
France: Consumer prices fell 0.3% in July after being unchanged in June. Prices rose 1.7% year-on-year in July.
Switzerland: Producer and import prices fell 0.5% month-on-month in July. On an annual basis, producer and import prices increased 0.5%.
UK: Construction output in the second quarter was revised upwards to 8.6% from 6.6%, with the Office for National Statistics suggesting the revision could add 0.1% to the GDP's 1.1% expansion during the period.
