FX Brief: Weaker Exports Weigh On Sentiment

A summary of news and snapshot of moves from today’s Asia session.

  • Weak export numbers from Japan weighed on sentiment, with manufacturing confidence hitting a 3-year low. Treasuries and equity markets are lower, although contained remains contained overall.
  • Australian employment failed to light another match under rate-cut calls, supporting AUD during a slightly risk-off session. Unemployment remained steady at 5.2%, although RBA will need to see this lower over the coming months to justify recent cuts. Participation rate remained at record highs, although the headline employment figure missed the mark, coming in at 0.5k versus 10k expected down from -9.5k prior.
  • AUD, CHF and JPY are the strongest majors, USD and CAD are the weakest. AUD/CAD is the biggest gainer, with AUD receiving a tailwind with okay employment data and CAD pressured from trade concerns. USD/JPY is the biggest loser of the session, all pairs remain within their typical daily ranges although AUD/JPY is the closest to breaching it.

Up next:

  • UK retail sales is a volatile number at the best of times, and May’s figures were no exception with the YoY rate plummeting -2.8% with cool weather to blame. Shorting GBP is not a new idea and, given GBP/USD’s minor up day yesterday, perhaps it’s approaching a time for a contrarian move and may not take a huge beat to if GBP/USD further. Still GBP/USD is hovering just below key resistance around 1.244/78, so it could be reaching a pivotal moment.
  • US Initial jobless claims hit a 50-year low last month, but it may not be a main driver for the USD with markets expecting further easing from the Fed. USD is receiving safe haven flows and, whilst data overall isn’t great, it’s performing better than the rest of the world on a relative basis. Still, keep USD/JPY in focus as it is approaching 107.54 support.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.