Dollar Rallies from Key Support

* The dollar rose on Wednesday as risk aversion increased. Global stocks dropped, led by plunging Chinese shares. The S&P 500 declined 4.47 points to 975.15. US durable goods orders fell more than expected in June due to the volatile transportation sector; however, posting the second straight increase excluding transportation. The Federal Reserve’s Beige Book showed most of the 12 regional districts declined at a slower pace in June and July, a further sign the US recession is abating. The yen was lower against the greenback but higher in cross trades. The Swiss franc dropped after the Swiss National Bank said it will halt any appreciation of the currency. The Canadian and Australian dollars fell as commodity prices and crude oil plunged.

* The EUR/USD fell for a second day after being unable to penetrate the 1.43 resistance. The pair was pressured by German deflation, declining US stocks and a poor US Treasury auction. The EUR/USD has broken its short-term uptrend; however, remaining in a sideways pattern. If the 1.40 support is broken, the pair will probably fall to 1.38. A deeper correction in the stock and commodity markets will further pressure the pair.

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Financial and Economic News and Comments

US & Canada

* US durable goods orders decreased a more-than-expected 2.5% m/m, the first decline in three months, to $158.6 billion in June, after a downwardly revised 1.3% m/m gain in May, data from the Commerce Department showed. The June decline was attributable to the volatile transportation sector, which tumbled 12.8% m/m, led by a plunge in civilian aircraft. Excluding transportation, durable goods orders unexpectedly rose 1.1% m/m in June, the second consecutive gain and the most in four months, after a downwardly revised 0.8% m/m increase. Shipments of non-defense capital goods excluding aircraft, used in calculating GDP, increased 0.1% m/m in June, the best reading since September 2008. June durable goods orders fell 25.0% y/y and fell 22.2% y/y excluding transportation.

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Europe

* Germany’s consumer prices fell a more-than-expected 0.6% y/y in July, the first annual drop since March 1987, after a 0.1% y/y increase in June, according to preliminary July CPI data from the Federal Statistical Office. The harmonized CPI, calculated for European purposes, also fell a more-than-expected 0.6% y/y, after June’s 0.0% y/y.

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* UK mortgage approvals rose more than expected in June to 47,584, a 14-month high, from May’s upwardly revised 44,169, figures from the Bank of England showed, signaling the UK housing market is stabilizing.

* The increase in total net lending to individuals in June (£0.4 billion) was lower than both the May increase (£0.5 billion) and the previous 6-month average; the increase in net lending secured on dwellings (£0.3 billion) was unchanged m/m in June and below the previous 6-month average; and consumer credit rose a net £0.1 billion in June, in line with the previous 6-month average, the BOE reported.

Asia-Pacific

* Japan’s retail sales declined a more-than-expected 3.0% y/y in June, a 10th consecutive year-on-year drop, extending the longest losing streak since 2003, according to data released by the Ministry of Economy, Trade and Industry. June retail sales unexpectedly decreased 0.3% m/m, the first drop since March. Large retailers’ sales fell 6.7% y/y in June, more than anticipated.

* Japanese small business confidence improved to 41.1 in July from 38.0 in June, the Shoko Chukin Bank reported. A reading below 50 suggests pessimists outnumber optimists.

* The Reserve Bank of New Zealand kept the official cash rate unchanged at 2.50%, as forecast. RBNZ Governor Alan Bollard said: “Despite signs of a leveling off in economic activity, the economy remains weak. We continue to expect to see a patchy recovery get underway toward the end of the year, but it will be some time before growth returns to healthy levels….The OCR could still move modestly lower over the coming quarters. We continue to expect to keep the OCR at or below the current level through until the latter part of 2010.”

Источник: Hans Nilsson

29.07.2009