FXStreet (MUmbai) – The Australian dollar was heavily sold-off across the board in Asia after Australia’s May retail sales missed expectations while the April revision also discouraged markets. While the Kiwi kept the offered tone, moving away slightly from five year lows reached on Thursday. On the other hand, USD/JPY stood resilient despite below estimates US labour market report.
Key headlines in Asia
Australia’s May retail sales disappoints, negative revision
Japan services PMI: Growth reaches nine-month high
HSBC China Services PMI: Slowest expansion in over a year
Dominating themes in Asia – centered on JPY, AUD, NZD
A slew of economic data was reported in Asia, with the Australian retail sales numbers having major impact on the Australian dollar against its competitors. The dollar-yen pair wavered around 123 handle, with the US dollar broadly supported despite the crucial NFP figures fell shy of estimates. However, Japanese services sector activity which came in at nine-month highs kept a check on USD/JPY.
The Aussie dropped to fresh three-month lows near 0.7570 levels following the release of below estimate Australian retail sales figures which once again dampened market sentiment after poor trade data released on Thursday. Australia’s May retail sales came below expectations at +0.3% versus +0.5% market estimates, with last month’s data also revised lower to -0.1% versus 0%. While the Kiwi remained largely subdued with the upside capped by losses seen in its OZ counterpart.
Among the Asian indices, the Nikkei 225 in Tokyo trades marginally lower by -0.21% at 20481.20, while Australian benchmark the ASX 200 snapped previous gains and dropped -1.24% to trade at 5530.10.
Heading into Europe – centered on EUR, GBP
As US markets remain closed today on account of Independence Day holiday, we expect volatility to persist during the European trading hours. While a handful macro events on the EUR calendar will also keep EUR, GBP traders busy.
Services sector PMIs across the Euro area economies will be published today. Euro zone services sector reported 54.4 last time, with the same number expected as a final result. The PMI for the euro area’s number one economy’s services sector showed 54.2 points in June, with the same figure expected in the final reading.
While services PMI report from the UK May is seen ticking up to 57.5 from the 56.5 booked in the previous cycle. We also have June results from the euro zone’s retail business, with a projected monthly expansion of 0.1% from 0.7% reported in May.
Among the central bankers’ speeches, ECB Vice-President Vítor Constancio delivers the keynote speech at a conference on quantitative restrictions on private credit flows/asset-based macro-prudential policy tools, organized by Lietuvos bankas in Vilnius, Lithuania. While ECB Governing Board member Erkki Liikanen will speak at the SUERF and Bank of Finland conference in Helsinki.
Markets now shift their focus towards Greek bailout referendum. Greeks will vote on Sunday, July 5 whether to accept or reject the latest offer by creditors to the Tsipras government aimed at unfreezing €7.2 billion in remaining bailout funds. The Greek vote is expected to spur volatility in to Monday’s trading.
EUR/USD Technicals
Valeria Bednarik, Chief Analyst at FXStreet notes, “The common currency, was unable to hold above the key 1.1100 figure, and trades steady below it, with the 1 hour chart showing that sellers surged around the 100 SMA, whilst the technical indicators are turning slightly lower above their mid-lines. In the 4 hours chart, the price remains below its moving averages, whilst the technical indicators aim higher, but remain below their mid-lines, keeping the upside limited.”
(Market News Provided by FXstreet)