Daily Market Review — 13/08/2015
Retail Sales Should Confirm or Disprove Recovery of the US Economy
During yesterday’s trading session, the pair began falling. The People’s Bank of China devalued the national currency once again, but to a lesser extent than before, namely by 1.65. Market participants interpreted this move as proof of slowing of the Chinese economy. In addition, economic statistics from China also wasn’t encouraging. Industrial production and retail sales in China rose at a slower pace than analysts expected this. Therefore it is clear as day that Chinese economy is in trouble. Against this background, market participants began to buy reserve currencies such as the Swiss franc and the Japanese yen, with the exception of the US dollar, as the players are concerned that the Fed will not raise rates at its meeting in September, because not only the Chinese economy is in poor condition, but the whole the world as a whole. Today, the dynamics of the pair may be influenced by the publication of the Producer & Import Prices in Switzerland at 07:15 (GMT). Also, market participants expect data on Retail Sales and Initial Jobless Claims in the US, which is scheduled for 12:30 (GMT).
Resistance: 0.9772, 0.9793, 0.9860
Support: 0.9729, 0.9675, 0.9640
Yesterday’s session became negative for the New Zealand currency once again. Reports of repeated devaluation of the Chinese currency against the US dollar sent the pair to new yearly lows. After that, market participants began to buy the New Zealand dollar on fears that clear slowdown of the Chinese economy will postpone the first rate hike by the US Federal Reserve. The dynamics of pair was also influenced by data on the Business NZ PMI, which was released yesterday at 22:30 (GMT). According to statistics, the index came in at 53.5 against the forecast level of 55.2. Moreover, today it became known that the Chinese regulator again devalued the national currency by 1.1% against the US dollar. However, it didn’t cause such a violent reaction in the market, as the previous two. Market participants have become more relaxed about such steps of the Chinese central bank, considering this phenomenon as a part of the reform of the Chinese banking system. Also, market participants’ attention should be focused on data on retail sales in New Zealand, which will be released today at 22:45 (GMT).
Resistance: 0.6639, 0.6671, 0.6720
Support: 0.6588, 0.6555, 0.6536
Yesterday’s trading session began with falling of all major US stock indexes amid reports about another devaluation of the yuan. This and negative statistics from China has prompted investors to sales. The industrial production and retail sales in China rose in June less than analysts’ forecasts. Therefore, investors began to question the recovery of the world’s second largest economy. And with that, yesterday’s trading session the major US stock markets finished in green on the background of recovery in oil prices. Today’s reaction of major US stock indexes on another devaluation of the Chinese yuan has been more relaxed.
Resistance: 2088.98, 2095.66, 2103.00
Support: 2075.71, 2069.53, 2056.33
After spending the last two trading days in a narrow corridor, silver prices finally broke through the upper limit of the range. Such dynamics were caused by the two-day devaluation of the Chinese national currency against the US dollar. After receiving information about another devaluation of the yuan, the dollar got some short-term support but then lost its positions amid investors’ fears that the Fed will not raise rates at its meeting in September due to the slowdown of the world’s second largest economy. The People’s Bank of China ordered state banks to sell US dollars in the last 15 minutes of the trading session to somehow support the national currency. This triggered another drop in the dollar against other currencies. Accordingly, the quotations of precious metals went up. This morning the Chinese yuan was again devalued by 1.1%, which caused another short-term strengthening of the US dollar and the sale of precious metals.
Resistance: 15.55, 15.63, 15.71
Support: 15.31, 15.12, 14.98