USD higher ahead of the Consumer Price Index- 22/07/2014

Currencies

USD

The US Dollar Index is trading at 80.56, up by 0.02% today as the market awaits the Consumer Price Inflation report, and showing some sensitivity to the US Yield curve, which means that this market is pricing in more expectations of an earlier rate hike than said.

The Economic calendar has the CPI report today, which could make the market move in strength, especially if data comes in far from the forecast 2.1% YoY in June. Excluding food and energy, data should stay still at 2%. The month-on-month figure is expected to ease from 0.4% to 0.3%. The American front will have the US Housing Price Index, to rise from 0.0% to 0.4% in May, US Existing Home Sales, to ease from 4.9% to 2.0% in June, and the US Richmond Fed Manufacturing Index, set to improve from 3 to 5 in July.

At the moment, the US Dollar is flat against the EUR, up against the JPY (+0.13%), down against the GBP (+0.02%), up against the USD/CHF (+0.04%), down against the AUD (+0.16%), and up against the CAD (+0.02%).

AUD

The AUD is trading in strength due to RBA Governor Stevens speech today, that didn’t include talking about the Aussie. That’s how the market is now trading: no word from Stevens is a bullish factor. Taking into account that he always talks the Australian Dollar down, today’s market reaction makes perfect sense. A silent Stevens equals a hawkish RBA?

The AUD is up against the JPY (+0.29%), the USD (+0.14%), the EUR (+0.14%), the GBP (+0.10%), the CAD (+0.16%), the CHF (+0.17%), and the NZD (+0.24%).

CHF

Today’s economic calendar assured interest for CHF trading. The Swiss trade balance disappointed greatly by having its June figures at a surplus of 1377M, instead of a smoothed easing from 2849M to 2820M. Exports dropped from 17325M to 16866M, while imports rose from 14476M to 15489M.

The CHF is down today, by 0.07% against the GBP, by 0.05% against the USD, by 0.05% against the EUR, by 0.21% against the AUD. Still, the CHF is performing better than the JPY (+0.08%).

 

Stocks/Indices

Asian markets saw its prices rising today and its regional benchmark index threatens to close at its highest in six years, despite the conflicts in Ukraine and tensions between the US and Russia.

Due to the Consumer Price Index report, stocks are seen to be more prone to risk today. Futures for the S&P 500 are suggesting exactly that, and after recent volatility there the market could be after new highs.

The news is that Saudi Arabia will be opening a $531 Billion stock market for foreigners. Currently, it will be limited to domestic investors and investors from the six-nation Gulf Cooperation Council.

Commodities

Crude Oil

WTI crude oil continues its way higher after the $1.5 drop on Friday. Yesterday’s close at $102.83 wasn’t enough and investors want more. The market is facing the 50-day SMA at $103.52 which could force a pause for breath.

 

Gold

Yesterday, Gold didn’t have the upside strength investors were looking for and it fell below the hourly uptrend, causing the breakout to the downside seen today. The precious metal has fallen by 5$ to $1307 already, ahead of the US Consumer Price Index. Driving the price of Gold is expectation of higher interest rates in the US, but US-Russia tension may also have its effect in a run for safe havens, including Gold.

Wild Card

JPY

The JPY is weak today: down against the USD (-0.14%), the EUR (-0.10%), the CHF (-0.06%), the GBP (-0.15%), the AUD (-0.31%), and the CAD (-0.12%). As one looks at technical charts, one can find room for even more weakness. For instance, the EUR/JPY could reach the 2008-high soon.