Dollar is rebounding strongly for up after the positive JOLTS job opening Data since 2000
Volatility spiked at the close of markets after President Trump threatened North Korea with tough talk. The CBOE VIX Index jumped to its highest in a month while the Yen rose and stocks fell. The Dow ended a 10 day winning streak and closed lower. The Dollar Index (USD/DXY) finished 0.22% higher following upbeat US JOLT job openings data.
China’s Trade Surplus rose to US$46.7 billion from a forecast rise of US$45.4 billion.
US JOLTS JOB Openings (June): rose to 6.16 million from 5.70 million in May and an expected 5.74 million.
Global stocks finished lower. The DOW closed down 0.15% while the S&P 500 dropped 0.25%.
EUR/USD – dropped further to close down 0.4% at 1.1758 (1.1795 yesterday).
USD/JPY – fell to 110.30 at the NY close from 110.77 yesterday. The Dollar slipped further in Sydney, settling at 110.15 currently.
GBP/USD – extended losses to end at 1.2993, down 0.4% from 1.3033 yesterday.
AUD/USD – finished flat at 0.7911. Support held at 0.7887, the overnight low.
NZD/USD – closed down 0.43% to 0.7342 (0.7362 yesterday). The RBNZ monetary policy meeting is tomorrow.
Outlook: The Dollar got a boost from the strong JOLTS data. The US Job openings increased 461,000 in June to total 6.16 million, the highest reading since the series started in late 2000. This further reinforced Friday’s solid payrolls gain. Apart from the Yen, the Dollar’s rise was broad-based. Trump’s threat to North Korea of fire and fury has shaken markets off its complacency. The latest geo-political development favors the Japanese currency. Recent US data has turned favorable against that of Europe.
Today’s Events and Economic Data:
RBA Assistant Governor Kent delivers a speech to The Bloomberg Address in Sydney (GMT 10.35 pm, Aug 8/Local Time 8.35 am, Aug 9)
Australian Westpac Consumer Confidence (GMT 12.30 am, Aug 9/Local Time 10.30 am, Aug 9) – The previous reading was 0.4%
China July Annualised CPI and PPI (GMT 1.30 am, Aug 9/Local Time 11.30 am, Aug 9) – CPI forecast 1.5% from previous 1.5% while PPI is forecast to rise to 5.6% from the previous 5.5%.
UK Inflation Report Readings (GMT 10 am, Aug 9/Local Time 8 pm, Aug 9)
US Q2 Preliminary US Unit Labor Costs (GMT 12.30 pm, Aug 9/Local Time 10.30 pm, Aug 9) – median forecast 1.2% from previous 2.2%
US Q2 Non-Farm Productivity (GMT 12.30 pm, Aug 9/Local Time 10.30 pm, Aug 9) – median forecast 0.7% from previous 0.0%
Trading View: The Dollar will consolidate its gains at current levels within the ranges established in the past 24 hours. Data flow is now favoring the US and that should support a further bottoming for the Greenback.
EUR/USD – slip sliding away. The Euro bounced off 1.1715 overnight lows to close at 1.1757. There is good support between 1.1680 and 1.1710 and this should hold until Friday’s US CPI data. While the speculative market is still long the top side should be limited. Immediate resistance comes in at 1.1780 and then at 1.1800. Likely range today 1.1720-1.1790. Expect a further drift lower for the Euro.
USD/JPY – The Dollar slipped against the Yen as markets got into risk-off mode. Only a significant widening of the US and Japanese Ten year bond yields would see USD/JPY rise again. There is immediate support for USD/JPY at 110.00 and then at 109.80. Immediate resistance can be found at 110.60. Likely range today 109.90-110.60.
AUD/USD – The Aussie has held it’s overnight lows twice now around the 0.7885 level. Overnight low yesterday was 0.78869. This suggests some good buying interest at the lower levels. RBA Assistant Governor Kent speaks this morning to A Bloomberg function in Sydney. Will he continue the RBA’s rhetoric on the currency, and how sensitive will the market be? Bearing in mind that speculative Aussie Dollar longs are up to their highest total since early 2013, the risk is still lower. There is resistance at 0.7940 while support remains at 0.7885. A break of 0.7880 could see 0.7850. Likely range 0.7880-0.7930.
GBP/USD – Sterling closed under the 1.30 level, only just (1.2994). The recent BOE meeting took a lot of rate hike speculation out of the Pound. GBP/USD has immediate support at 1.2970 and then at 1.2950 (overnight low was 1.2953). Short term resistance lies at 1.3020 and then at 1.3040. In the current environment, the Pound will remain under pressure. Likely range 1.2950-1.3010.
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