Forex Daily Analysis - Tuesday, Aug 14th

Demand for USD Higher as Credit Market Turmoil Still Puzzles...
A need for USD-liquidity has pushed the USD higher, sending EURUSD close to the 1.36 figure.

Overnight News Bullets

• UK PPI Input July, out at -0.5% vs 0.7% exp. YoY out at 0.1% vs 1.4% exp.
• UK PPI output July, out at 0.2% vs 0.3% exp. YoY out at 2.4% in line with exp.
• UK PPI Output Core July, out at 0.2% in line with exp. YoY out at 2.3% vs 2.2% exp.
• UK DCLG House Prices June, out at 12.1% vs 11.1% exp.
• UK Leading Indicator Index June, out at 0.2% vs a prior reading of 0.1%.
• UK Coincident Indicator Index June, out at 0.2% in line with exp.
• UK RICS House Prices July, out at 12.6% vs 9.1% exp.
• US Advanced Retail Sales July, out at 0.3% vs 0.2% exp.
• US Retail Sales Less Autos July, out at 0.4% in line with exp.
• US Business Inventories June, out at 0.4% in line with exp.
• NZ Retail Sales June, out at -0.4% vs 0.4% exp. Ex-Auto out at -0.5% vs a prior reading of -0.5%.
• NZ Retail Sales Ex Inflation Q2, out at -0.6% vs 0.1% exp.
• JN Tertairy Industry Index June, out at 0.1% vs -0.2% exp.
  

Market

• FX: JPY continues stronger with EURJPY taking out 160.50 support, USDJPY breaking 117.20 is key for a further JPY bull run. Dollar remains range bound.

O/N Data Heat map:

EU	US	JP	UK	SZ	AU	CA	NZ	NO	SE	FR
0	0	+	-	0	0	0	-	0	0	0

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Calendar

Today's Highlights:

Time (GMT)	Region	Release	Consensus
08:30	UK	CPI MoM/YoY (JUL)	-0.2%/2.3%
08:30	UK	CPI Core YoY (JUL)	2.0%
08:30	UK	Retail Price Index (JUL)	207.0
08:30	UK	RPI MoM/YoY (JUL)	-0.1%/4.3%
09:00	EC	Euro-Zone GDP QoQ/YoY (2Q)	0.5%/2.8%
09:00	EC	Euro-Zone Industrial Production MoM/YoY (JUN)	-0.1%/2.3%
12:30	US	Trade Balance (JUN)	-USD61.0B
12:30	US	Producer Price Index MoM (JUL)	0.2%
12:30	US	PPI MoM/YoY (JUL)	0.2%/3.4%
12:30	US	PPI Ex. Food and Energy MoM/YoY (JUL)	0.2%/2.5%
14:00	US	IBD/TIPP Economic Optimism (AUG)	46.5
21:00	US	ABC Consumer Confidence (AUG)	-8

This and Next Week’s Highlights:

Date	Region	Release
15 Aug	AU	Westpac Consumer Confidence, Wage Cost Index
15 Aug	NO	Trade Balance, Exports, Imports, Norwegian Interest Rates,
15 Aug	UK	Bank of England Minutes, Claimant Count Rate, Jobless Claims Change, Avg. Earnings inc./ex. Bonus, ILO Unemployment Rate, Manual Unit Wage Costs
15 Aug	US	MBA Mortgage Applications, a string of CPI’s, Consumer Price Index, Empire Manufacturing, Net Long-Term TIC Flows, Total NET TIC Flows, Industrial Production, Capacity Utilization, DOE US Crude Oil Inventories, NAHB Housing Market Index,
15 Aug	CA	New Motor Vehicle Sales, Manufacturing Shipments
15 Aug	NZ	ANZ-Business NZ PMI
15 Aug	JN	Net Stocks/bonds Investment
16 Aug	AU	Consumer Inflation Expectation, Average Weekly Wages
16 Aug	GE	A string of CPI’s
16 Aug	SW	Industrial Production, Industrial Orders, Activity Level Index
16 Aug	UK	Retail Sales
16 Aug	EC	Euro-Zone CPI
16 Aug	CA	International Securities Transactions
16 Aug	US	Housing Starts, Building Permits, Initial Jobless Claims, Continuing Claims, EIA Natural Gas Storage Change, Philidelphia Fed

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What's going on?

• NZ's FinMin Cullen was quoted saying " the recent global financial market jitters had helped NZ by encouraging selling of the inflated NZD" and with Kiwi retail sales disappointing in the Asian session. NZDUSD continues its sell-off and a test of 0.7208, 200 day MA looks very likely intra-week.
• EURUSD hovering just above 1.3600 as the demand for dollars continues. Expect further downside acceleration if spot trades below the figure with at 1.3530-50 target intra-week.

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FX

EUR	USD	JPY	GBP	CHF	AUD	CAD	NZD	NOK	SEK	PLN
-	+	0	-	0	0	+	-	0	0	0

FX Trading Strategies

Pair	Supp.	Resis.	Comments
AUDUSD	0.8160	0.8520	We expect demand for USD to continue on back of the continuing turmoil in credit markets. In addition, carry trades are getting hit by reduction of risky assets. From our FX Orderbook, we sell the break of 0.8355 offer, stop bid at 0.8380, targeting 0.8260.

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