- Chinese CB leading index up 1.1% in May, 1.5% previous
- Japan’s services producer price index showed 0.6% gain vs. 0.4% consensus
- BOJ minutes: Easing is having its intended effect
- German Ifo business climate index and U.K. BBA mortgage approvals data due
- Eurogroup meetings to seal the deal for Greece today?
After charging across the forex charts yesterday, dollar bulls are taking it easy today and even returned some of their recent winnings. There have been no major market movers in the past few hours, even with a few data releases from Japan and China.
In Japan, the services producer price index chalked up a 0.6% gain, which was stronger than the projected 0.4% uptick but slightly weaker compared to the previous 0.7% rise. According to the freshly released BOJ meeting minutes, their current pace of monetary policy easing is having its intended effect and they will carry on with this until inflation reaches their target.
Since the minutes didn’t really contain anything that yen traders haven’t heard before, the Japanese currency barely reacted to the release. Yen pairs are having a mixed performance, with USD/JPY consolidating below 124.00 (-0.02%), EUR/JPY popping up from an intraday low of 138.31 (+0.14%), and GBP/JPY testing 195.00 (+0.05%).
China’s CB leading index is hinting at a potential slowdown in economic activity, as the reading slipped from 1.5% to 1.1% in May. This could pave the way for weaker demand for Australia’s raw material exports, which explains why AUD/USD is down 15 pips (-0.20%) and AUD/JPY is trading 6 pips lower (-0.06%).
It will be the turn of the euro and the pound to take center stage in the next few hours, with the German Ifo business climate index up for release at 8:00 am GMT and the U.K. BBA mortgage approvals report lined up at 8:30 am GMT. Germany’s business sentiment index is set to dip from 108.5 to 108.2, possibly due to the uncertainty surrounding the Greek debt talks. Meanwhile, the U.K. could report an increase in approved home loans from 42.1K to 43.1K in May.
The real star of the show could still be the Greek debt drama, as Eurogroup leaders and Greece’s government officials are set to convene for the nth time. Forex market watchers don’t seem to be getting tired of all these discussions since many hopefuls are keeping their fingers crossed that a deal will be struck within the week. Updates showing that an agreement will be made soon could allow the euro to regain ground once more so make sure y’all stay tuned!
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