ENM: Europe Roundup: Dollar Index on track for biggest weekly gains
EUR/USD plays a tight range in between 1.0873-1.0907.
USD/JPY trading in between 123.92-124.23 levels.
Schaeuble- Last attempt to deal with this difficult task.
BoE's Carney- Rate hike decision to come into 'sharper relief' by year-end Hikes to proceed slowly, rise to a lvl perhaps half as high as historical averages.
IMF's Largarde- Debt relief is needed to make Greek accord more viable.
EU's Tusk- Greek exit could increase risk of political contagion.
ECB's Nowotny- It's not certain whether Greek banks will open Monday.
Greek Finance Ministry extend bank holiday through to July 19.
Bild- Greek PM will fire several ministers in reshuffle; plans autumn elections.
Economic Data Ahead
(0830 ET/1230 GMT) US June CPI, +0.3% m/m, +0.1% y/y eyed; last +0.4%, unchanged.
(0830 ET/1230 GMT) US June core, +0.2% m/m, +1.8% y/y eyed; last +0.1%, +1.7%.
(0830 ET/1230 GMT) US June real weekly earnings; last -0.1% m/m.
(0830 ET/1230 GMT) US June housing starts, 1.11 mln AR eyed; last 1.04 mln, -11.1% m/m.
(0830 ET/1230 GMT) US June building permits, 1.15 mln AR eyed; last 1.25 mln, +9.6% m/m.
(1000 ET/1400 GMT) US Jul UOM sentiment index - prelim, 96.1 eyed; last 96.1.
(1130 ET/1530 GMT) US June Cleveland Fed median CPI; last +2.2% y/y.
Key Events Ahead
(0945 ET/1345 GMT) Fed Trade os 30-yr Ginnie Mae max $925mln.
(1000 ET/1400 GMT) Fed Vice Chair Fischer in U.S. Chamber of Commerce.
(1145 ET/1545 GMT) Fed Trade ops 30-yr F.Mae/Fr.Mac max $1.975 bln.
FX Recap
The US dollar is on track for its biggest weekly gain in two months as investors bet on the chances of a U.S. interest rate hike by the end of the year. It rose 1.5 percent against a basket of currencies in a week.
EUR/USD is supported around 1.0900 levels and currently trading at 1.0882 levels. It has made intraday high at 1.0905 and low at 1.0868 levels. The European currency keeps its gains vs. the US dollar at the end of the week, with EUR/USD in a consolidative pattern around 1.0900. German lawmakers from both sides of an aisle are expected to vote on Friday in favour of starting talks on a third bailout for Greece, despite Finance Minister Schaeuble's opposition. ECB left monetary policies unchanged yesterday as widely expected. President Mario Draghi said that asset purchase program continued as planned and results showed that inflation expectations recovered since June. Ahead in the day, US inflation figures and the Reuters/Michigan index are also due in the US economy. Initial support is seen around at 1.0842 and resistance at 1.1243 levels. Option expiries are at 1.0800 (1.5BLN), 1.0850 (907M), 1.0900 (1.2BLN), 1.0925-30 (1.1BLN), 1.0950 (401M), 1.1000 (2.2BLN).
USD/JPY is supported around 124.00 levels and posted a high of 124.22 levels. It has made intraday low at 123.90 and currently trading at 124.10 levels. The greenback edged lower versus the yen this session on the back of profit-taking after the buck touched fresh six week highs against it major competitors backed by Fed Chair Yellen's hawkish comments and the recent two back-to-back sessions of upbeat US macro data releases. In the day ahead, a set of crucial US economic releases such as CPI and consumer sentiment data will influence further moves in USD/JPY. Near term resistance is seen at 124.57 and support is seen at 120.63 levels. Option expiries are at 123.00 (642M), 124.25 (360M).
GBP/USD is supported around $1.5600 levels. It made an intraday high at 1.5671 and low at 1.5601 levels. Pair is currently trading at 1.5607 levels. Pair rose to a session high of 1.5671 in the European session and could end the week higher, thereby snapping the three week losing streak. The pair has run into the resistance at 1.5638, which is the 38.2% fib retracement of the rally witnessed in June. It suffered losses on Thursday even though the Bank of England governor Mark Carney indicated that UK interest rates could rise "at the turn of this year". With no major UK data due for release, the pair could witness lacklustre trading ahead of the US CPI release. Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels. Option expiry is at 1.5700 (300M).
NZDUSD is supported above 0.6500 levels and trading at 0.6536 levels and made intraday low at 0.6502 and high at 0.6545 levels. Following a two-day decline the kiwi steadied above the $0.65 handle, but still remains at its 2009 lows. Due to the lower CPI headlines, Reserve Bank of New Zealand (RBNZ) will have no qualms about easing policy much further in the coming months. The next RBNZ meeting is scheduled for July 22. Market will eye on US macro economic data for the further directions. Initial support is seen at 0.6465 and resistance at 0.6600 levels.
AUD/USD is supported around 0.7400 levels and trading at 0.7391 levels. It has made intraday high at 0.7417 levels and low at 0.7384 levels. The European session put the Aussie back below $0.74 handle, but it was the stronger greenback that weighed the most. Moreover, weak NZ CPI data also contributed to the downside. There are no Australian data due for release. Tonight's US session will remain again in focus with more US data. Initial support is seen at 0.7325 and resistance at 0.7647 levels. Option expiries are at 0.7490 (213M). USD/CAD: 1.2975 (365M), 1.3000 (350M).
