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The Greenback was off to a shaky start but managed to regain some footing thanks to mostly upbeat data. The Australian dollar, on the other hand, gave up some ground for the most part of the session.

Risk-off moves continued to prop up the lower-yielding Swiss franc while the pound also retreated on the Customs Bill amendments.

  • Canadian foreign securities purchases down from 9.09B CAD to 2.18B CAD
  • U.S. headline retail sales up 0.5% vs. 0.4% forecast in June
  • U.S. core retail sales up 0.4% as expected in June
  • U.S. May headline retail sales upgraded from 0.8% to 1.3%
  • U.S. May core retail sales upgraded from 0.9% to 1.4%
  • Empire State manufacturing index dipped from 25 to 22.6 vs. 20.3 forecast
  • U.S. business inventories at 0.4% as expected, 0.3% previous
  • U.K. customs bill amendment passed Parliament
  • New Zealand quarterly CPI at 0.4% vs. 0.5% expected, 0.5% previous

Major Events/Reports:

Upbeat U.S. retail sales

Consumer spending stayed in the pink of health last June, with the headline figure posting a stronger than expected 0.5% gain versus the estimated 0.4% uptick. The core reading came in line with expectations of 0.4% retail sales growth.

What caught most dollar bulls’ attention were the significant upgrades to May figures, indicating that retail sales was much stronger than initially reported. The headline figure was positively revised from 0.8% to 1.3% while the core reading was upgraded from 0.9% to 1.4%.

Note that consumer spending, which is more or less closely gauged by retail sales data, accounts for two-thirds of overall U.S. economic growth. With that, these positive figures reaffirm speculations that the sector accelerated in the second quarter and likely led to a strong boost in GDP.

Customs Bill accepted by U.K. gov’t

After much debate in British Parliament, Prime Minister May’s camp accepted the amendments to the Taxation (Cross Border Trade) Bill a.k.a. Customs Bill.

The four amendments accepted are:

  • No customs border in Northern Ireland
  • U.K. to leave the EU VAT regime
  • U.K. could stop collecting tariffs for the EU unless the union reciprocates
  • New legislation needed if the government wants to form a customs union

Of course many worry that this could make negotiations more complicated and most likely prevent any deal being struck. This also cast more doubts on No. 10’s ability to stick to its guns since the amendments catered to Conservative “No Deal” Brexiteers’ demands.

However, PM May reiterated that these are in line with the Brexit White Paper agreed upon in an earlier meeting.

Some risk-off moves

Risk aversion extended its stay in the financial markets, dragging a couple of U.S. equity indices down and pushing crude oil lower.

  • Dow 30 index is up 44.95 points to 25,064.36 (+0.18%)
  • S&P 500 index is down 2.88 points to 2,798.43 (-0.10%)
  • Nasdaq is down 20.26 points to 7,805.72 (-0.26%)

Oversupply concerns popped back in the oil market when Russian energy minister Novak suggested that they could ramp up output by 1 million barrels per day. Also, Libya’s NOC lifted the force majeure status on the El Feel oilfield to signal that oil production will resume.

Major Market Mover(s):


The Greenback had a rocky performance in the earlier session and was still shaky at the start of the New York session. However, mostly upbeat data threw the spotlight back on tightening expectations and allowed the currency to pare some losses.

USD/JPY found support around 112.25, EUR/USD hit a high of 1.1718 then retreated to a low of 1.1694, GBP/USD dipped from 1.3267 to 1.3217, and AUD/USD dropped from .7442 to a low of .7410.


The Swissy held on to most of its intraday gains and went for more as risk aversion lingered in financial markets.

USD/CHF continued to slide to .9970, EUR/CHF tumbled from 1.1714 to 1.1672, GBP/CHF fell back to the 1.3200 handle, AUD/CHF is down to .7390, and CHF/JPY ticked higher to 112.78.


On the flip side, the Aussie sank to the bottom of the forex pile on risk-off moves and possibly some positioning ahead of the RBA minutes release.

AUD/JPY fell from 83.60 to a low of 83.22, EUR/AUD rose from 1.5734 to 1.5792, GBP/AUD recovered to the 1.7850 levels, and AUD/CAD fell back to .9738.


Sterling dipped against most of its rivals on news of the U.K. government agreeing to amendments in the Brexit Customs Bill.

GBP/JPY fell from 149.11 to 148.52, EUR/GBP popped up to a high of .8853, GBP/NZD ticked down to the 1.9500 mark, GBP/CAD held on to the 1.7400 handle, and GBP/CHF inched below the 1.3200 mark.

Watch Out For: