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The Greenback was unable to claw its way back to the top spot as risk-on vibes lingered while the New York session rolled along.

However, commodity currencies returned some of their gains on news of China’s ban on Micron sales. Crude oil and gold ticked higher, but U.S. stock indices closed in the red.

  • Canadian Markit manufacturing PMI up from 56.2 to 57.1 in June
  • U.S. factory orders rebounded by 0.4% vs. 0.1% forecast, -0.4% previous
  • U.S. IBD/TIPP Economic Optimism Index up from 53.9 to 56.4 vs. 54.2 consensus
  • U.K. PM May going for “softest possible Brexit”
  • ECB member Praet: Seeing substantial progress in sustained inflation adjustment
  • Saudi Arabia to use spare oil production capacity if needed
  • New Zealand GDT auction yielded 5.0% drop in prices from earlier 1.2% dip
  • U.S. total vehicle sales up from 16.9M to 17.5M in June vs. 17M forecast
  • Australia’s AIG services index up from 59.0 to 63.0 in June

Major Events/Reports:

Pre-holiday slowdown

Action in the forex market was less exciting than usual as most majors cruised inside ranges while traders were likely busy with last-minute preps for Fourth of July festivities.

Besides, there were no major reports out of the U.S. economy, with only medium-tier data such as the IBD/TIPP Economic Optimism Index, factory orders, and total vehicle sales printed – all of which showed stronger than expected results.

Nonetheless, it’s still worth noting that U.S. equity indices failed to take part in risk-on flows that lifted European markets and commodities earlier on.

  • Dow 30 index is down 132.36 points to 24,174.82 (-0.54%)
  • S&P 500 index is down 13.49 points to 2,713.22 (-0.49%)
  • Nasdaq is down 65.01 points to 7,502.67 (-0.86%)

Crude oil shrugged off reports that Saudi Arabia confirmed that it stands ready to use its spare oil output capacity if needed. The commodity likely drew support from news of an outage in Alberta and Libya’s force majeure.

More moves from China

The negative performance of U.S. equities for the day is being attributed to China’s decision to ban Micron chip sales, reviving speculations that this could be a retaliatory measures to the U.S. tariffs set to take effect later this week.

Micron is an American company that produces semiconductor devices, including dynamic random-access memory, flash memory, and solid-state drives.

As it turned out, China’s Fuzhou Intermediate People’s Court issued a preliminary injunction against the company’s Chinese subsidiaries to block sales of specified chips, hard drives, and memory sticks. However, some say that this was merely a response to patent infringement complaints filed earlier on and shouldn’t be blown out of proportion.

Nonetheless, Micron shares tumbled 5.5% in reaction and dragged shares of other chipmakers like Nvidia, AMD, and Intel along with it.

Major Market Mover(s):

AUD

The Aussie returned some of its intraday gains when news of China’s ban on Micron chip sales hit the newswires during the latter part of the New York session.

AUD/USD retreated from .7402 to a low of .7370, AUD/JPY slipped from 82.04 to a low of 81.45, EUR/AUD ticked up from 1.5756 to a high of 1.5807, and GBP/AUD climbed to a high of 1.7874.

Watch Out For:

  • 1:30 am GMT: Australia’s retail sales m/m (0.3% expected, 0.4% previous)
  • 1:30 am GMT: Australia’s trade balance (larger surplus of 1.21B AUD expected)
  • 1:45 am GMT: Chinese Caixin services PMI (dip from 52.9 to 52.7 expected)