Sterling slips in data void
Chinese state media branded online gaming as opium and stocks in the industry dropped hard. The fall extended to the hang Seng index which was down 1.48% on the day. There is pressure on the Chinese authorities to crack down on the gambling and gaming industry. GBPHKD rate is two cents higher this morning at 10.81.
Aussie Dollar stable after RBA reaffirms bond tapering
The other overnight news includes the Reserve Bank of Australia left their base rate on hold but maintained their commitment to start reducing (tapering) their bond purchases. That was a surprise to some, who had expected them to pause due to the impact of covid related lockdowns. Aside from the surprise factor, tighter monetary policy does strengthen currencies, so it isn’t a surprise that the GBPAUD exchange rate dropped a couple of cents overnight. It is back to AUD 1.88 this morning though.
We lack data today, so the markets may well meander a little. However, the afternoon does deliver some US numbers. Factory orders should show roughly 1.0% growth in June; down on the previous month but still growth. Anything less will weaken the USD but the crude oil inventories from the US also influence the USD. So this isn’t a black and white picture. GBPUSD is down a little from yesterday’s highs. We start Tuesday at $1.3900 but it is lively.
We get the global dairy price index later today. The dairy sector accounts for roughly a quarter of New Zealand’s export income, so it will affect the NZ Dollar one way or the other. It is also quite unpredictable, so NZD buyers and sellers beware. Overnight tonight we will get NZ unemployment data. The unemployment rate is forecast to have fallen to 4.5%; a very respectable figure. However, there are murmurs that this may not be achieved, so there is scope for the Kiwi Dollar to weaken.
NZ Dollar volatility expected later
You have options to trade before the data, take a punt on the outcome or place automated orders to try to capture some of the overnight volatility. Let us know your thoughts. The GBPNZD stepped back from yesterday’s highs and starts Tuesday at NZD 1.9830.
We lack Eurozone data today and you can see the indecision in the GBPEUR chart. This pair is in the narrowest ranges between €1.1685 and €1.1760. So when it does break out, there will be a lot of pent up demand unleashed in either direction.
The data diary is fuller as the week progresses, so we can’t get too comfy here.
And this date marks the remarkable day in 1936 when sprinter Jesse Owens shocked the Aryan Nation by winning the first of his 4 gold medals at the Berlin Olympics in front of Adolf Hitler. An immaculate, one-man humiliation of Hitler’s entire philosophy. Awesome.