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JPN All Industries Activity Index Gains 0.4% for May The Japanese all industrial activity index, a measure of overall production by all sectors of the Japanese economy, rose 0.4% for the May period. On the year, activity was down 0.5%. Services faltered as consumers thighten their retail spending, and cut back on dining and travel. There was a strong increase in new industrial output, especially cars and phones, which helped offset losses in services. SWZ Trade Surplus Sets Record, But Both Exports and Imports Fall In Switzerland, the trade surplus rose to a record of 2.41 billion francs in June, surprising forecasts. The figure is a result of a larger fall in imports compared to exports. Exports were down 1.8% on the month, while imports declined 2%. Swiss consumers are spending less on foreign goods, while the slowdown in the US and UK hampers Swiss exports to those markets. EUR/CHF - Euro Surges Vs. Franc as European Stocks and Risk Appetite Rebounds
After a rocky start to European stocks and a boost from the Swiss trade number the Euro-Franc pair fell overnight, reaching support at 1.6160. In the latter half of the European session stocks rebounded somewhat and Dollar strength added to investors' risk appetite. The Euro surged more than 100 pips to test the area near 1.63. EUR/USD - Fed Official Hawkish Comments, Falling Oil and Paulson Boost Dollar Bulls
After a flat ranging session overnight, the US open brought a big burst of Dollar buying. Dollar bulls were given ammunition from Philadelphia Fed Governor Plosser who in a speech said that the Fed should raise interest rates "sooner rather than later" as inflation is too high. The Euro-Dollar pair fell 160 pips to 1.5760. Another contributing factor to greenback strength was oil falling as much as $4. GBP/USD - Pound Relinquishes 2:1 Level, Fall to 1.99
The Dollar pared its losses to the Pound from yesterday and overnight, during this NY rally. After hitting an intra-day high near 2.0080 the Pound-Dollar pair slid 160 pips to test 1.99. Unflattering releases from the US only managed to stall the Dollar's gains for a short time. US Richmond Fed Manufacturing Index Falls Further in July The Richmond Fed Manufacturing Index slipped to -16 for the July period, 4 points lower than June's -12. Shipments and new orders were down, and employment remains weak. The result surprised forecasts on the downside. US OFHEO Shows House Prices Down 0.3% in May U.S. home prices fell 0.3% on a seasonally-adjusted basis from April to May, according to the government's monthly house price index. For the 12 months ending in May, U.S. prices fell 4.8 percent. The monthly figure was better than expected as certain regions including the Pacific, the East coast and parts of the mid-West showed improvement. CAN Retail Sales Disappoint Forecasts, Gains Come Mainly on Higher Gas Station Purchases In Canada, retail sales were up 0.4% in May, slower than the pace in April, and slightly below expectations. The report showed that the biggest jump came as a result of sales in the auto sector, though mainly a result of a 2.4% increase in gasoline stations sales - a direct result of higher gasoline prices. USD/CAD - Greenback Rebounds From Testing Parity vs Loonie, Climbs to 1.01
The weaker Canadian retail sales figure, hawkish comments from Plosser, and lower oil prices worked to pressure the Canadian Dollar, which weakened against the greenback. The US Dollar-Canadian Dollar pair was up more than 100 pips from its level near parity at the start of the global session. Most of the gains came during the NY session, as the pair broke above 1.01 around 1 PM. Upcoming Releases Today, Australia releases data on consumer inflation for the 2nd quarter. Overnight, the UK will reveal meeting minutes, data on mortgage approvals, and a survey of manufacturing orders. The Euro-zone posts figures on industrial new orders. Tomorrow, Canada releases CPI data for June and the US Fed unveils its "beige book" and the US shows its weekly oil inventories. Tomorrow afternoon, the Reserve Bank of New Zealand will decide on rates, and is expected to hold steady at 8.25%. |
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