GLOBAL DATA FLOWS IN THE SPOTLIGHT ON THURSDAY
A steady stream of economic data will headline the financial markets on Thursday following two days of congressional testimony by US Federal Reserve Chairman Jerome Powell. For currency traders, data continues to offer important insights about the health of national and regional economies, which plays an important role in forecasting monetary policy.
Switzerland kicks off the session with a report on trade scheduled for the early morning. Switzerland’s surplus is forecast to widen in June on the strength of rising exports.
From there, we quickly shift our focus to the United Kingdom. At 08:30 GMT, the Office for National Statistics will report on retail sales for the month of June. Receipts at retail stores are projected to rise by 0.4% month-on-month after gaining 1.3% in May. In annualized terms, sales are projected to rise 3.9%.
The retail sales category likely expanded 0.3% on month and 3.7% annually, according to a median estimate of economists.
In the United States, initial jobless claims will hit the newswire at 12:30 GMT. The number of Americans filing for first-time unemployment benefits likely rose by 6,000 to a seasonally adjusted 220,000 in the week ended 10 July. Claims fell sharply the week before, partly due to seasonal influences.
At the same time, the Philadelphia Fed will release its monthly manufacturing survey. The July index is projected to read 22.0, up from 19.9 in June.
North of the border, ADP Inc. will release Canadian employment numbers at 12:30 GMT.
In terms of monetary policy, Fed policymaker Randal Quarles is scheduled to deliver a speech at 13:00 GMT.
Europe’s common currency was unable to break out of a downtrend on Wednesday, as prices remained capped below 1.1650 US. At the time of writing, EUR/USD was trading at 1.1640, where it was little changed compared with the previous close. In terms of technical, the pair faces firm resistance at 1.1660, which corresponds with the Wednesday high. On the opposite side of the spectrum, immediate support is located at 1.1600.
After crashing to a low of 1.3010 on Wednesday, cable managed to recover around the 1.3070 mark – still in a firm downtrend compared with last week. Since peaking at 1.3346 on 9 July, GBP/USD has lost nearly 300 pips. It was last trading at 1.3065. From a technical perspective, resistance is now seen at 1.3100. Support is weak at the intraday low of 1.3010, which also happens to be a new low for the year.
The dollar-yen exchange rate remains in a firm uptrend, with prices approaching yearly highs. At the time of writing, USD/JYP was trading at 112.76, little changed from the previous close. The bulls are now eyeing 113.00 and beyond as demand for safe havens continues to fade.