Forex: Aussie Dollar Gains, Yen Drops on China Data and Syria Hopes

DailyFX

Talking Points

  • Risk Appetite Swells Amid Easing Risk of Western Intervention in Syria
  • Aussie Dollar Higher, Japanese Yen Sold on Pickup in Market Sentiment
  • S&P 500 Futures Hint Positive Market Mood Likely to Carry Forward

The Australian Dollar outperformed in overnight trade, rising as much as 0.6 percent on average against its leading counterparts. The sentiment-sensitive currency was pulled higher as stocks continued to rise across Asian bourses, with regional shares adding 1.1 percent on average. The Japanese Yen underperformed as the “risk-on” mood drove demand for carry trades funded in terms of the perennially low-yielding currency. The unit fell as much as 0.6 percent on average against the G10 majors.

The positive tone appears to have followed comments from US President Obama, who said in an interview that a Russia-proposed arrangement that would see Syria surrender its chemical weapons could put on hold the push to initiate military intervention against the government of President Bashar al-Assad. Traders have worried that Western intervention might widen the conflict, disrupting oil shipments from the region and undermining the global recovery.

Another supportive set of Chinese economic data underpin investors’ chipper mood. The East Asian giant reported that Industrial Production rose 10.4 percent year-on-year in August, topping median forecasts calling for a 9.9 percent increase and yielding the best reading since March 2012. Retail Sales rose 13.4 percent over the same period, recording the biggest gain since December 2012.

A quiet economic calendar hints sentiment trends are likely to remain in control for the time being. European stock exchanges are following their Asian counterparts upward and S&P 500 futures are pointing firmly higher, suggesting the markets’ rosy disposition is likely to carry forward as Wall Street comes online.

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Asia Session:

GMT

CCY

EVENT

ACT

EXP

PREV

22:45

NZD

Card Spending Retail (MoM) (AUG)

0.8%

0.6%

0.5%

22:45

NZD

Card Spending Total (MoM) (AUG)

0.4%

-

0.4%

23:01

GBP

RICS House Price Balance (AUG)

40%

39%

37%

23:50

JPY

Bank of Japan August 7-8 Meeting Minutes

-

-

-

23:50

JPY

Japan Money Stock M2 (YoY) (AUG)

3.7%

3.8%

3.7%

23:50

JPY

Japan Money Stock M3 (YoY) (AUG)

3.0%

3.0%

3.0%

23:50

JPY

Tertiary Industry Index (MoM)

-0.4%

-0.5%

-0.5%

1:30

AUD

NAB Business Conditions (AUG)

-6

-

-7

1:30

AUD

NAB Business Confidence (AUG)

6

-

-3

5:30

CNY

Industrial Production YTD (YoY) (AUG)

9.5%

9.4%

9.4%

5:30

CNY

Industrial Production (YoY) (AUG)

10.4%

9.9%

9.7%

5:30

CNY

Fixed Assets Ex Rural YTD (YoY) (AUG)

20.3%

20.2%

20.1%

5:30

CNY

Retail Sales YTD (YoY) (AUG)

12.8%

12.9%

12.8%

5:30

CNY

Retail Sales (YoY) (AUG)

13.4%

13.3%

13.2%

6:00

JPY

Machine Tool Orders (YoY) (AUG P)

-1.8%

-

-12.2%

Euro Session:

GMT

CCY

EVENT

EXP/ACT

PREV

IMPACT

6:45

EUR

French Industrial Production (MoM) (JUL)

-0.6% (A)

-1.4%

Low

6:45

EUR

French Industrial Production (YoY) (JUL)

-1.8% (A)

-0.1%

Low

6:45

EUR

French Manufacturing Production (MoM) (JUL)

-0.7% (A)

-0.4%

Low

6:45

EUR

French Manufacturing Production (YoY) (JUL)

-2.5% (A)

-0.4%

Low

8:00

CNY

New Yuan Loans (AUG)

711.3B (A)

699.9B

Medium

8:00

CNY

Aggregate Financing RMB (AUG)

1570.0B (A)

808.8B

Medium

8:00

CNY

Money Supply M2 (AUG)

14.7% (A)

14.5%

Medium

8:00

EUR

Italian GDP s.a. and w.d.a. (QoQ) (2Q F)

-0.3% (A)

-0.2%

Medium

8:00

EUR

Italian GDP s.a. and w.d.a. (YoY) (2Q F)

-2.1% (A)

-2.0%

Medium

Critical Levels:

CCY

SUPP 3

SUPP 2

SUPP 1

Pivot Point

RES 1

RES 2

RES 3

EURUSD

1.2990

1.3111

1.3183

1.3232

1.3304

1.3353

1.3474

GBPUSD

1.5427

1.5553

1.5625

1.5679

1.5751

1.5805

1.5931

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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