World progress and excessive rate of interest considerations dragged the New Zealand greenback to the underside of the foreign exchange heap this week.

In the meantime, robust U.S. knowledge impressed hawkish Fed bets and pushed the U.S. greenback greater throughout the board.

Missed the key foreign exchange headlines? Right here’s what it’s essential find out about final week’s FX scene:

USD Pairs

Anti-risk world progress considerations and pro-risk “peak Fed rate of interest” speculations following the earlier week’s sluggish U.S. CPI studying stored the U.S. greenback in tight ranges within the first half of the week.

The Dollar began gaining extra persistently throughout the board because the U.S. and different main economies printed robust sufficient financial experiences to help longer intervals of excessive rates of interest if not much more fee hikes from the key central banks.

USD gained essentially the most towards JPY and high-yielding bets like NZD, AUD, and GBP and noticed weak features/small losses towards CHF and CAD.

🟢 Bullish Headline Arguments

NY Manufacturing Index for July: 1.1 (-6.0 forecast; 6.6 earlier); workers index popped to 4.7 from -3.6 earlier; costs paid index fell to 16.7 vs. 22.0 earlier

Retail Gross sales for June: 0.2% m/m (0.3% m/m forecast; 0.5% m/m earlier); core retail gross sales was inline with expectations at 0.2% m/m (0.3% m/m earlier)

NAHB Housing Market Index ticked up in July to 56 vs. 55; “The shortage of resale stock means potential dwelling consumers who haven’t been priced out of the market proceed to hunt out new development in better numbers”

Preliminary jobless claims for the week ending July 15: 228K (242K forecast; 237K earlier); the much less risky four-week shifting common additionally fell 9.25K to 237.5K

Philly Fed Manufacturing Index for July: -13.5 vs. -13.7 in June

🔴 Bearish Headline Arguments

Industrial Manufacturing in June: -0.4% y/y (0.5% y/y forecast; 0.2% y/y earlier)

Constructing Permits for June : 1.44M (1.46M forecast; earlier revised greater to 1.5M); dwelling begins fell by -8.0% m/m however higher than anticipated and nonetheless at pre-pandemic ranges.

Present Dwelling Gross sales for June: -3.3% m/m (-1.2% m/m forecast; 0.2% m/m earlier); the downturn is principally attributable to extraordinarily low stock of pre-owned houses

EUR Pairs

Overlay of EUR vs. Main Currencies Chart by TV

There weren’t lots of catalysts to trigger a re-pricing of ECB fee hike expectations, so the euro behaved extra as a countercurrency outdoors of small Eurozone data-related spikes.

ECB Governor Council member Klaas Knot did assist EUR some on Tuesday when he hinted {that a} September fee hike isn’t a accomplished deal.

The widespread foreign money noticed essentially the most features towards NZD, JPY, GBP, and AUD however misplaced to CHF, USD, and CAD.

🟢 Bullish Headline Arguments

ECB Governing Council member Klaas Knot stated financial tightening past subsequent week’s assembly is something however assured — suggesting officers may quickly pause their unprecedented marketing campaign of interest-rate hikes.

Euro-area annual inflation fell to five.5% y/y in June 2023 as anticipated; core inflation strengthened to five.5% y/y (5.4% y/y forecast; 5.3% y/y earlier)

Germany’s producer costs edged up 0.1% y/y in June – the bottom since November 2020 – vs. 0.0% anticipated, 1.0% y/y in Might

Euro Space Flash Client Confidence for July 2023 improved by 1 level to -15.1, persevering with its sluggish restoration since 2022 low ranges round -30

GBP Pairs

Overlay of GBP vs. Main Currencies Chart by TV

The British pound was buying and selling in tight ranges and going together with threat sentiment when the U.Ok.’s CPI figures confirmed sharp slowdowns in June.

Talks of a much less hawkish BOE dragged U.Ok.’s bond yields and lessened the demand for GBP within the second half of the week.

GBP appears to be like set to finish the week decrease towards its main counterparts with exception to the Kiwi and the yen.

🟢 Bullish Headline Arguments

Falling gasoline costs dragged the U.Ok.’s shopper costs from 8.7% y/y to 7.9% y/y in June. Core CPI additionally eased from 7.1% y/y to six.9% y/y.

Manufacturing unit gate costs eased from 2.7% y/y in Might to 0.1% in June, the bottom fee since December 2020

🔴 Bearish Headline Arguments

Retail gross sales for June: 0.7% m/m (0.1% m/m forecast/earlier)

CHF Pairs

Overlay of CHF vs. Main Currencies Chart by TV

An absence of market-moving Swiss knowledge releases meant that CHF principally took its cues from general threat sentiment and counter foreign money flows.

The Swiss franc’s safe-haven attraction helped it achieve floor towards “riskier” bets like NZD, GBP, AUD, EUR, and even CAD within the first half of the week.

CHF misplaced a few of its intraweek features, nevertheless, after robust knowledge prints from the U.S. made the U.S. greenback extra enticing as a protected haven towards the higher-yielding currencies.

🔴 Bearish Headline Arguments

Commerce surplus tightened from 4.4B CHF to three.3B CHF in June as exports fell by 1.7% m/m whereas imports grew by 3.7%

AUD Pairs

Overlay of AUD vs. Main Currencies Chart by TV

Chinese language and world progress considerations dragged AUD to downtrends early within the week.

Fortunately for AUD bulls, the RBA’s sorta hawkish assembly minutes and Australia’s surprisingly robust June labour knowledge enabled the comdoll to recoup a few of its intraweek losses.

Till the U.S. dropped its robust preliminary jobless claims report, that’s.

Talks of the Fed having room to maintain its charges excessive and perhaps execute a pair extra fee hikes weighed on threat property like AUD, and the comdoll misplaced its features towards EUR, CHF, USD, and CAD.

🟢 Bullish Headline Arguments

China’s industrial manufacturing up by 4.4% y/y in June vs. 2.5% anticipated, 3.5% in Might

China’s mounted asset funding elevated by 3.8% ytd/y vs. 3.4% anticipated, 4.0% in Might

RBA’s July assembly minutes confirmed that the Board agreed that “some additional tightening could also be required” and hints at revisiting the speed hike transfer on the August assembly

The Convention Board Main Financial Index grew by 0.1% m/m in Might after a 0.3% downtick in April

MI main index improved from -1.01% to -0.51% in June. Expectations of a protracted RBA fee hike pause helped, whereas subdued progress outlook dragged.

Australia added internet 32.6K jobs in June vs. 15K anticipated, 76.6K earlier. The unemployment fee dipped from 3.6% to three.5% because the participation fee edged 0.1% decrease to 66.8%

PBoC raised a parameter on cross-border company financing underneath its macro-prudential assessments (MPA) to 1.5 from 1.25, permitting firms to borrow extra abroad in proportion to their property

China’s Nationwide Growth and Reform Fee Deputy Director Li Chunlin shared that two new insurance policies for supporting non-state-owned companies shall be launched quickly

Quarterly NAB survey confirmed enterprise confidence rising 1pt to -3 whereas enterprise circumstances dropped 8 pts to +9 as companies “moderated significantly” in Q2

🔴 Bearish Headline Arguments

China’s GDP grew by 0.8% in Q2 2023, slower than the two.2% quarterly progress in Q1. Annual GDP got here in at 6.3%, quicker than Q1’s 4.5% uptick however slower than the 7.1% progress anticipated

China’s retail gross sales slowed down from 12.7% to three.1% y/y in June

CAD Pairs

Overlay of CAD vs. Main Currencies Chart by TV

Danger aversion? Who she?

Because of internet optimistic Canadian knowledge releases and better crude oil costs, CAD shrugged off a lot of the threat aversion vibes and traded greater towards its main counterparts.

🟢 Bullish Headline Arguments

International funding in Canadian securities for Might: C$11.2B (-C$2.5B forecast; C$12.7B prevoius); “Canadian traders decreased their holdings of overseas securities by $2.8B in Might, after buying $2.4B value in April.”

Wholesale gross sales (excluding petroleum, petroleum merchandise, and different hydrocarbons and excluding oilseed and grain) rose 3.5% as anticipated (vs. -1.4% earlier) to C$83.6B in Might.

CPI for June 2032: 2.8% y/y (3.0% y/y forecast; 3.4% y/y earlier); led by falling power prices to a 27-month low; core CPI fell to three.2% y/y (3.6% y/y forecast) vs. 3.7% y/y earlier

Industrial Product Value Index for June: -0.6% m/m (0.1% m/m forecast; -0.6% m/m earlier; Uncooked Supplies Value Index was -1.5% m/m (-0.4% m/m forecast; -5.0% m/m earlier)

Housing begins in June: 281K (200K forecast/earlier)

New Housing Value Index for June: 0.1% m/m (-0.1% m/m forecast; 0.1% m/m earlier)

🔴 Bearish Headline Arguments

Retail gross sales for Might 2023: 0.2% m/m (0.5% m/m forecast; 1.0% m/m earlier); core retail gross sales was 0.0% m/m (0.3% m/m forecast; 1.2% m/m earlier)

NZD Pairs

Overlay of NZD vs. Main Currencies Chart by TV

The New Zealand greenback was in all probability the most important loser this week as profit-taking from the earlier weeks’ features received combined in with general threat aversion and different main central banks having extra causes to lift rates of interest. 

NZD noticed a gentle promoting all week aside from when New Zealand printed a nonetheless comparatively excessive inflation replace for Q2, Australia dropped a powerful (hawkish) jobs report, and when China made strikes to stimulate its financial system.

🟢 Bullish Headline Arguments

Inflation up by 1.1% q/q in Q2 2023 vs. 1.2% in Q1, 0.9% anticipated. Annual CPI dropped from 6.7% to six.0% in Q2 because of decrease petrol costs and better rates of interest

🔴 Bearish Headline Arguments

Providers PMI fell to 50.1 in June (52.5 forecast) from a revised 53.1 earlier learn; Employment index fell to 49.1 vs. 52.3 earlier; New orders dipped to 51.3 vs. 55.4 earlier

JPY Pairs

Overlay of JPY vs. Main Currencies Chart by TV

Very similar to different protected havens, threat aversion pushed the yen greater within the first half of the week.

However BOJ members sticking to their hawkish bias (regardless of a barely greater nationwide core CPI) made the foreign money much less enticing towards its main counterparts.

JPY weakened amidst risk-taking on Tuesday and slid on a sluggish and regular downtrend to finish the week decrease towards all of its main counterparts aside from NZD.

🟢 Bullish Headline Arguments

Japan posts first annual commerce surplus in 23 months as exports grew by 1.5% y/y whereas imports dipped by 12.9% in June

🔴 Bearish Headline Arguments

BOJ Governor Kazuo Ueda hinted at prolonged ultra-loose insurance policies, saying that “our general narrative on financial coverage stays unchanged” if the prospect of sustained 2% inflation stays distant

Japan Nationwide Core CPI: 3.3% y/y (3.2% y/y forecast / earlier)

Japanese authorities downgraded its financial outlook on Thursday from 1.5% for the fiscal yr ending March 2024 to 1.3%; raised its 2023 shopper value inflation forecast to 2.6% from 1.7% prior

Sources aware of the Financial institution of Japan stated that the BOJ is probably going leaning in direction of preserving yield management regular subsequent week