JPY Shines Against Most Currencies, NZD Up Across The Board

against most currencies through the European session as USD/JPY fell to ¥98.43, EUR/JPY came off to ¥131.71, GBP/JPY backtracked to ¥153.27, and AUD/JPY sank to ¥88.90. The July corporate service price index printed on the screws at +0.4% y/y. Traders await remarks from BoJ Deputy Governor Iwata on Wednesday followed by BoJ’s Morimoto on Thursday. Many data due on Friday include August PMI, July consumer prices, July employment and labour numbers, July industrial production prints, July construction orders, and July housing starts numbers. The government’s Economic Panel convenes this week to deliberate the expected Japanese sales tax increase. Japanese media reported Japan will seek the G-20 presidency in 2016.

The New Zealand Dollar appreciated across the board through the European session as NZD/USD reached US$ 0.7837, EUR/NZD fell to NZ$ 1.7059, and NZD/JPY moved higher to ¥77.26. PM Key talked down interest rates, saying the upcoming loan restrictions from 1 October will prevent rates from creeping too high. S&P today reported NZ’s outlook as “stable.” Kiwi shook off a bad July trade balance that came in at –NZ$ 774 million, a reversal from the prior +NZ$ 374 million print as export were off marginally and imports were drastically higher. Thursday’s August NBNZ business confidence will be closely watched.

The Australian Dollar found a bid against most peers through the European session as AUD/USD tested US$ 0.9042, EUR/AUD came off to A$ 1.4785, and GBP/AUD retreated to A$1.7211. There were no major Aussie data released overnight and July new home sales numbers will be closely watched on Thursday followed by Friday’s July private sector credit growth. UBS predicted RBA may reduce the OCR target if A$ does not come off and is forecasting A$ at US$ 0.88 in three months. China’s Sheng said Chinese PPI remains negative and a “serious problem” because of overcapacity.

The Swiss franc was on the losing end against most currencies through the European session as USD/CHF gained to CHF 0.9241, EUR/CHF appreciated to CHF 1.2351, CHF/JPY retreated to ¥106.64, and GBP/CHF climbed to CHF 1.4384. The July UBS consumption indicator will be released on Wednesday and the August KOF leading indicator is due on Friday.

The British pound was mixed across the board through the European session as GBP/USD fell to US$ 1.5560 and EUR/GBP weakened to £0.8585. Today was a Bank holiday in the U.K. and trading ranges were quite tight. Remarks from BoE Governor Carney will be closely watched on Wednesday. Nationwide August house prices are due on Wednesday along with CBI August sales followed by Friday’s July mortgage approvals, July consumer credit, and July money supply numbers.

Gold and Silver established fresh multi-week highs before coming off through the European session with Gold reaching US$ 1406.85 and Silver reaching US$ 24.292 before inching down. This was Gold’s first foray above the $1400 level in months and came on the heels of elevated tensions in the Middle East following last week’s reported chemical weapons attack in Syria. The UN is prepared to investigate the chemical attack this week and the US is said to be inching closer to military involvement. Gold is also taking its cues from the Fed taper debate and was bid higher on Friday on weak US home sales numbers that caused some trading desks to pare back their expectations for a September taper. CFTC positioning data on Friday reported institutional players increased their long gold futures and options positions to the highest levels since February.

Crude Oil was weaker through the European session as Brent crude futures fell to US$ 110.48 after being capped at US$ 110.73 and WTI crude futures fell to US$ 106.46 after running out of steam at US$ 106.94. The CFTC reported bullish positions on crude oil receded for the fourth consecutive week to 302,762 contracts. There is growing concern that Middle Eastern violence could disrupt crude supplies. Oil Movements last week reported OPEC will reduce oil shipments through early September by about 320,000 daily barrels to 23.6 million barrels per day.