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Geopolitics and Economic Data Put the Pound and the EUR in the Spotlight

Earlier in the Day:

It’s was a busier start to the day on the economic calendar this morning. The Pound, Japanese Yen, and Aussie Dollar were in action in the early part of the day.

Out of UK

The BRC Retail Sales Monitor increased by 4.7% in August, year-on-year. In July, sales had risen by 4.30%.

The Pound moved from $1.31652 to $1.31638 against the Dollar upon release of the figures.

For the Japanese Yen

Household spending slid by 6.5% in July, partially reversing a 13% jump in June. Economists had forecast a 2.3% decline. Year-on-year, spending tumbled by 7.6%, following a 1.2% decline in June. Economists had forecast a 3.7% decline.

According to the Statistic Bureau,

  • Spending on culture & recreation (-21.0%), clothing & footwear (-20.2%), and transportation & communication (-19.6%) weighed heavily.
  • There were also declines in spending on housing (-13.9%), food (-2.6%), and education (-1.4%).
  • Spending on furniture & household utensils jumped by 16.6%, however.
  • There were also increases in spending on fuel, light & water charges (+2.9%) and medical care (+4.2%).

The Japanese Yen moved from ¥106.304 to ¥106.292 upon release of the figures that preceded finalized 2nd quarter GDP numbers.

According to 2nd estimates, the Japanese economy contracted by 7.9%, quarter-on-quarter versus an estimate 8.1% contraction. This was worse than a prelim 7.8%, however.

According to finalized numbers:

  • Capital expenditure fell by 4.7%, revised down from a prelim 1.5% decline.
  • External demand fell by 3%, which was in line with the previous estimate.
  • Private consumption slumped by 7.9%, revised up from a previous estimate 8.2% tumble.

Year-on-year, the economy contracted by 28.1% versus an estimate of 28.6%. This was also worse than a prelim 27.8% contraction.

The Japanese Yen moved from ¥106.289 to ¥106.255 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.01% ¥106.28 against the U.S Dollar

For the Aussie Dollar

The NAB Business Confidence Index rose from -14.0 to -8 in August. In July, the Index had fallen from 0 to -14, ending a run of 3 consecutive monthly increases.

By contrast, the Business Survey Index fell from 0 to -6.

The Aussie Dollar moved from $0.72793 to $0.72832 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.03% to $0.7279.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.01% to $0.6691.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Key stats include German trade figures and French nonfarm payrolls ahead of the final 2nd quarter GDP numbers for the Eurozone.

With the ECB in action on Thursday, expect any downward revision to GDP numbers to have a material impact. The rest of the stats should have a relatively muted impact on the day.

At the time of writing, the EUR was down by 0.13% to $1.1802.

For the Pound

It’s a quiet day ahead on the economic calendar, following this morning’s retail sales figures. There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats will continue to leave the Pound in the hands of Brexit and broader market risk sentiment.

At the time of writing, the Pound was down by 0.14% to $1.3148.

Across the Pond

Its a quiet day ahead for the U.S Dollar, with the no material stats to provide the Greenback with direction following Monday’s holiday.

Market risk appetite will remain the key driver on the day.

The Dollar Spot Index was up by 0.40% to 93.090 at the time of writing.

For the Loonie

It’s also a quiet day ahead, with no material stats due out to provide the Loonie with direction. That will leave the market focus on Wednesday’s Bank of Canada’s monetary policy decision.

Away from the economic calendar, geopolitics, and Trump’s continued focus on China will likely remain a key driver.

At the time of writing, the Loonie was down by 0.08% to C$1.3108 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.