The euro is “strong like bull†on Thursday as Greek Prime Minister Tsipras had another victory overnight. Late Wednesday, Greek Parliament passed a second package of reforms that was required to start talks on the financial rescue agreement. Passing with the backing of 230 of 300 Senate votes, this latest parliamentary victory for the capitulating Tsipras covered rules for dealing with failing banks and reforms to the justice system. A lot of work remains to be done but these two parliamentary victories pave the way for Mr. Tsipras’ next two battles, to be fought with creditors and his constituents. The euro is now pushing 200 pips higher above the Mondaylows during a week without any major economic data to guide price action. Sterling lost a bit of ground overnight following a rare miss in retail sales as it was reported consumer spending in June dropped 0.2% versus expectations of an increase of 0.3%. One day after BoE Chairman Mark Carney signaled a rate rise could be on the cards for early 2016, the pound should keep its bullish bias despite today’s minor blip.
Headlining the Asian session was the latest policy meeting by the Reserve Bank of New Zealand. Policy makers in Kiwi-land cut the headline rate by 25 bps to 3.00% and added that further easing is likely. Having fallen nearly 15% since April, the RBNZ commented that further falls to their currency are justified and the recent decline in dairy prices will curb economic growth. It’s Australian cousin is higher this morning, following a round of lower sessions as commodities such as oil, gold and copper experience heavy selling pressure. Although the drop in Chinese equities has remained off the front page this week, it is still in the forefront of many people’s minds. Should Chinese growth continue to falter into 2016, commodity prices could fall further as the market weighs Chinese demand.
Turning towards North America, things kick off at 830am EST with US weekly jobless claims. Once again the market is looking for a number below 300k, this week it is expected that only 280k Americans will have filed first time unemployment claims for the week ending July 17th. It has been a whippy week for the greenback, trading at the mercy of other major currencies, namely the euro and pound. As indicated earlier, the pound Sterling experienced a nice bounce on more hawkish comments from Mark Carney, and the euro continues to jaw bone on each new Greek vote. The US dollar should grind to a halt into next week as the market looks ahead toward Wednesday’s FOMC policy meeting. Janet Yellen and friends are expected to keep rates firm at 0.25%, but much attention will be paid to the policy statement released at 2pm EST.
Looking north, the Canadian dollar continues to grind lower, weighed down by ever-falling commodity prices. Gold prices touched their lowest levels since 2010 as speculators and investors continue to take profits. Following the 30% decline in Chinese shares since mid-June, a lot of fear exists concerning second half prospects. Although China’s economy continues to grow, perhaps it is not growing fast enough to sustain their thirst for commodity imports. Other commodities such as oil and copper are weighing on the Loonie and other so-called commodity currencies – the Australian dollar and Norwegian Krone. At 830am, Canadian retail sales for the month of May are divulged but all top tier economic data remains scarce through the end of the July.
Further reading:
GBPUSD Candlestick Reversal Signal Off Resistance – 4 hour Bearish Rejection
strong like bull
