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No major reports printed during the session, so forex traders mostly closed positions ahead of the weekend and kept the major currencies in tight ranges.

  • Japan’s flash manufacturing PMI down from 53.1 to 52.0 vs. 53.4 expected
  • Japan’s flash manufacturing output index down to nine-month low in June
  • Lack of catalysts keep major currencies in tight ranges

Major Events/Reports:

Japan’s flash manufacturing PMI

The earliest available indicator for Japan’s manufacturing sector dipped slightly in June, as both orders and output rose to their weakest paces since late last year.

Japan’s flash manufacturing PMI came in at a seven-month low of 52.0 in June when analysts had expected a 53.1 reading, while the manufacturing output index hit a nine-month low of 52.1 after clocking in at 54.0 in May.

Paul Smith, Senior Economist at IHS Markit, pointed to a “slight softening in market conditions” as reasons for the declines.

Despite that, he’s still optimistic about manufacturing trends, saying that “external demand is holding up well, and the sector continues to operate within a solid growth range.” More importantly, employment remains supported and firms are passing on higher costs to clients to the “greatest degree in over two-and-a-half years.”

Slight risk-taking

The dollar continued to lose out against most of its counterparts, as a lack of economic releases inspired traders to take profits from their post-FOMC positions and close shop for the weekend.

Of course, it also didn’t hurt that commodities like crude oil extended their upticks from the previous session.

  • Brent crude oil is currently up by 0.35% to $45.38
  • U.S. crude oil is up by 0.33% to $42.88

Meanwhile, Asian bourses ended mid-day trading with mixed results.

  • Nikkei is up by 0.13% to 20,137.50
  • Australia’s A SX 200 is up by 0.03% to 5,707.60
  • Shanghai index is down by 0.40% to 11,235.47
  • Hang Seng is up by 0.06% to 25,690

Major Market Mover(s):

USD

The lack of catalysts in the markets inspired some Asian session traders to take profits from their post-FOMC positions.

EUR/USD is up by 11 pips (+0.10%) to 1.1162, GBP/USD is up by 13 pips (+0.10%) to 1.2702, USD/CHF is down by 22 pips (-0.23%) to .9707, while USD/JPY is steady at around 111.25.

Comdolls

With commodity prices extending their recoveries from the previous session, it’s no surprise that the comdolls also received a bit of love from Asian session traders.

AUD/USD is up by 12 pips (+0.16%) to .7553, USD/CAD is down by 16 pips (-0.12%) to 1.3220, and NZD/USD is up by 3 pips (+0.04%) to .7266 after hitting a session low of .7249.

They also gained against the low-yielding yen with AUD/JPY jumping by 18 pips (+0.22%) to 84.06, CAD/JPY inching 16 pips (+0.19%) higher to 84.21, and NZD/JPY rising by 11 pips (+0.14%) to 80.89.

Watch Out For:

  • 7:00 am GMT: French flash manufacturing PMI (54.1 expected, 53.8 previous)
  • 7:00 am GMT: French flash services PMI (57.1 expected, 57.2 previous)
  • 7:30 am GMT: German flash manufacturing PMI (59.1 expected, 59.5 previous)
  • 7:30 am GMT: German flash services PMI expected to remain at 55.4
  • 8:00 am GMT: Euro Zone flash manufacturing PMI (56.9 expected, 57.0 previous)
  • 8:00 am GMT: Euro Zone flash services PMI (56.2 expected, 56.3 previous)