Daily Alert: Friday 21st July 2017

Mark NugentDaily Alert, July 2017

Forex Analysis for Friday 21st July 2017

Economic Calendar

UK Retail Sales beat expectations (0.6% vs 0.4%) and the rpior number was revised up (-1.1% vs -1.2%).

The key issue of the day was the ECB interest rate decision and Draghi’s press conference.

The ECB kept rates unchanged at 0.00%. Draghi’s press conference led to significant EUR appreciation as it was felt that an unwinding of QE was coming soon and the broadly expected dovishness did not materialise. The ECB said, at 1810, that “tapering of asset purchases may be a decision that could be made in October”.

Overnight –

RBA Deputy Governor Debelle stated no automatic reason to conform to recent hikes abroad.

New Zealand Finance Minister Joyce stated NZ firms are coping well with NZD at current levels, added NZD reflects strong NZ economy.

USD bears have once again benefited from US disputes, as news that Special Investigator Mueller is said to be looking at probe for President Trump’s business transactions, further weighing on the dollar.

Market Reaction

The USD index is pushed down by the rising EUR and Trump-related woes. Equities are mixed with the S&P500 and Nasdaq making new all-time highs and the UK indices doing well. Gold continues to rise on the weak USD. US 10 Year yields continue to drop as the JPY goes nowhere. The EUR appreciates significantly on the Draghi press conference. The GBP drops despite the good Retail Sales number – driven by EUR strength. The AUD is talked down by the RBA and the NZD is talked up by the RBNZ.

News Media

Draghi is no solice to Europe stock traders hurt by currency

Today’s Calendar

CAD CPI and Core Retail Sales

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