Economic Data Puts the EUR and the Dollar in Focus as the Markets React to Capitol Hill News

Earlier in the Day:

It is a busier start to the week on the economic calendar this morning. The Kiwi Dollar and the Japanese Yen were in action through the early hours.

For the Kiwi Dollar

Trade figures were in focus this morning. In May, New Zealand’s trade surplus widened from NZ$414m to NZ$469m.

Year-on-year, the trade balance fell from a NZ$760m surplus to a NZ$62m deficit. This was the first annual deficit since the year ended June 2020.

According to NZ Stats,

• The monthly value of goods imports increased NZ$1.3bn (31%) from May 2020 to NZ$5.4bn.
  • Car imports, by value, hit an all-time high, driven by a recovery from the COVID-19 pandemic.
  • Declines in the exports of textiles and food wastes partially offset the increase in imports of vehicles, parts, and accessories.
• Monthly goods exports were up NZ$461m from May 2020 to NZ$5.9bn.
  • Dairy product exports increased by NZ$154m (12%) to NZ$1.5bn from May 2020.
  • Logs, wood, and wood articles exports also contributed, rising by NZ$108m from May 2020.

The Kiwi Dollar moved from $0.70603 to $0.70607 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.04% to $0.7063.

For the Japanese Yen

Inflation figures were in focus this morning.

In June, Tokyo’s core consumer prices held steady to avoid another year-on-year decline. Tokyo’s core consumer prices had fallen by 0.2%, year-on-year, in May. Economists had forecast a core annual rate of inflation of -0.1%.

According to the Ministry of Internal Affairs and Communication,

• Prices for education and prices for furniture & household utensils both increased by 3.3%.
• There were also increases in prices for culture & recreation (1.0%), clothes & footwear (0.6%), and housing (0.4%).
• Prices for transportation & communication (-3.7%) and fuel, light, & water charges (-2.2%) weighed, however.
• There was also a modest 0.2% decline in prices for medical care.

The Japanese Yen moved from ¥110.888 to ¥110.881 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.04% to ¥110.884 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar was flat at $0.7583.

The Day Ahead

For the EUR

It’s a relatively quiet day ahead on the economic data front. German consumer confidence figures for July are due out later today.

Early in the week, ECB President Lagarde had spoken of a speedier economic recovery, fueled by consumer spending. Weak numbers from Germany would test EUR support.

At the time of writing, the EUR was down by 0.03% to $1.1929.

For the Pound

It’s a quiet day ahead on the economic calendar.  There are no material stats due out of the UK to provide the Pound with direction.

With no stats for the markets to consider, we can expect further market reaction to Thursday’s BoE policy decision and forward guidance.

At the time of writing, the Pound was down by 0.03% to $1.3918.

Across the Pond

Inflation and personal spending figures will be in focus later in the day.

Finalized Michigan Consumer Sentiment and Expectation numbers are also due out. Barring marked revisions from prelim figures, however, these should have a muted impact on the majors.

On Thursday, the Dollar Spot Index rose by 0.01% to end the day at 91.814.

For the Loonie

It’s another particularly quiet day ahead on the economic data front. There are no material stats due out of Canada to provide the Loonie with direction.

The lack of stats will continue to leave the Loonie in the hands of market risk sentiment on the day.

At the time of writing, the Loonie was up by 0.02% to C$1.2321 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.