US DOLLAR
The greenback is set to close the week in negative territory after coming under selling pressure, triggered by a dovish economic assessment by Powell. Twitter feeds from the White House may claim a small victory after the Fed seems to leave the door open for a courtesy rate cut. The economic calendar is light today: Producer Price Index for final demand advanced 0.1% in June and is unlikely to encourage heavy directional bets in the currency market. We expect some position re-calibration instead ahead of key data releases from Beijing. The National Bureau of Statistics is set to release Q2 GDP, retail sales and unemployment over the weekend. Recent survey pointed out to a slowdown in the economy amid trade tensions and the data may come as a confirmation.
CANADIAN DOLLAR
The Canadian dollar is set to challenge the 1.30-mark post and is seen extending its gains versus the greenback today. Strong performance from oil futures market one of the key drivers behind recent CAD strength. WTI is up 0.2% on the day, trading close to a two-month high.
EURO
The Euro is trading within a narrow range around the mid-point of 1.12 as we enter the final session of the week. There was little to offer in terms of data. Headline industrial production in the euro bloc rose by 0.9% in May compared to the previous month. Market welcomed the turnaround, after a 0.4% decline in April. However, further details revealed the situation in Germany remains alarming. German production recorded the largest decrease (down 4.3%) among the member states, increasing the odds of a recession.
BRITISH POUND
GBP/USD is stuck inside a tight trading range, after bouncing from seven-month low. We expect further gains to be capped however, over growing uncertainty on the future of UK-EU relationship. The case for a disorderly Brexit is injecting nervousness into the market and keeping businesses on tenterhooks.
JAPANESE YEN
USD/JPY is down 0.3% as the greenback struggles to add to gains above the mid-point of 108. Meanwhile, it was a terrible week for Japan in terms of incoming economic data. Industrial production was revised lower, adding to fears that the Japanese economy is slowly slipping into a recession. The Bank of Japan may start to explore the option of expanding its stimulus package in a bid to halt further decline and revive the economy.
