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July 19: economic & forex news ★★★
Thursday, July 19, 2012 - 06:20
The MSCI Asia Pacific Index (MXAP) of shares added 1.5% yesterday.
JPY rose against all but one of its 16 major peers amid concern no progress will be reached on the euro zone’s crisis, what will increase demand for a safe Japanese currency. USD weakens against the high-yielding currencies such as
AUD,
NZD and
CAD. Mild weakness in the U.S. has been positive for risky currencies as the stimulus becomes more and more likely. Demand for risky assets was also supported as volatility for major currencies slid to the lowest since November 2007.
GBP/USD strengthens on Thursday. Yesterday the pound dropped after the minutes of the BoE meeting this month showed the decision to keep its interest rate at a record low 0.5% was unanimous, while 7 members voted in favor of expanding the QE by a further 50 billion pounds.
Although US dollar is broadly weakening, the single currency is even weaker.
EUR/USD seems unable to overcome resistance at $1.2300. German lawmakers vote on a 100-billion euro bailout for Spanish banks (12:00 GMT). Angela Merkel will likely get the majority needed to for this piece of legislation to pass successfully. The sole euro-related data release is the publication of the region’s current account (08:00 GMT). The market’s attention will focus, though, on French and Spanish debt auctions (8:50-9:50 GMT). Euro is trading at record minimums vs. Aussie and kiwi and at more than 20-year minimums against loonie.
In the US, as usual on Thursdays, watch for the jobless claims figures (12:30 GMT). In addition, there are 2 more important releases: existing home sales and Philly Fed manufacturing index (14:00 GMT). The Fed’s Chairman Ben Bernanke told lawmakers on Wednesday that it was "certainly possible" that the central bunk could take new steps to support the economic recovery if the situation at the labor market doesn’t improve.