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The UK economy shrank after GDP data came in much less than previous though more than anticipated. Comments from Fed officials on rate hikes have helped the Dollar gain more ground. Japanese Yen suffers bearish pressure on a positive risk tone day. Investors look up to the RBNZ rate decision next week with 50bps in focus.
GBPUSD suffers fresh selling pressure as King Dollar firms up following a 4-day losing streak. UK’s GDP data dropped from 8.7% to 2.9% as the economic outlook deteriorates underpinning the Pound’s strength. Fed member Daly’s comments on a possible 50bps hike in September helped lift the dollar. In the New York session, the Michigan Consumer Sentiment and US Baker Hughes oil rig count will be due. The pair is down -0.55% after a rejection at 1.22200 and bears are targeting the 1.2000 key level.
AUDJPY is up +0.27% as Yen weakens on a risk-on tone. The Yen is undermined by the RBA-BoJ rate difference as Japan remains in the negative zone on rates with -0.10% while the RBA is at 1.85%. The pair is trading above 94.50 intraday low and a break above 95.00 psychological resistance may give bulls 95.80. The downside target below the 95.00 level is at the 94.00 psychological level.
EURNZD recovered earlier losses after bouncing off 1.59500 support. The French and Spanish CPI data for July came in with minimum volatility in the EU session. The French CPI was at 0.3% [MoM] vs 0.3% anticipated while the Spanish CPI was -0.3% vs -0.2% surveyed. The NZD Business NZ PMI came at 5.7 vs 50.00 expected. A breach of the 1.59500 support may reinforce a slide to 1.5800. To the upside, the pair is capped by1.60500. Focusing ahead the RBNZ will be meeting, and the market has priced in 50bps.
European stocks are trading higher on Friday as traders continue to focus on the inflation outlook. The UK 100 rose by +0.20% trading above 7460 intraday support. A rally above 7520 resistance may renew bullish targets to 7550 and 7600. However, to the downsides 7400 and 7370 may remain key levels to watch. CAC 40 is up +0.38% from 6500 support. Further gains may face resistance at 6600 and 6680. DAX is trading +0.45% higher though the upside rally is challenged by 13800 resistance and 14000.
US stock futures are moving in positive territory to end the week. DJIA futures continue up after a jump in Disney on Thursday. The index gained +0.18% with a low at 33300 and a number above 33600 could give bulls 34000 and 34200 in the near term. The broad-based S&P 500 futures were up +0.19% with an intraday low residing at 4200. Traders watch out for key levels at 4250 and 4300. The heavy-tech Nasdaq futures added +0.27% and some more gains are capped by 13600.
Elsewhere, oil prices make headway in the EU session as demand seems to be rising. European gas supply concerns after a halt on Russian gas are raising demand for oil on the gas-to-oil switch. A Louisiana booster station has stopped two pipelines following a leak in gas and oil fields in the Gulf of Mexico suppressing supply. As of {GMT +02:00} USWTI was up +0.23% with a bullish cap at $96/b and $98/b. Brent soared by +0.62% at $100/b and further up is $102.00 and $102.50.
