- CNY: Non-Manufacturing PMI, HSBC Services PMI
- AUD: Q2 GDP, RBA Gov Stevens Speaks
- EUR: Spanish Services PMI, Italian Services PMI, Final Euro Zone Services PMI, Retail Sales
- GBP: Halifax HPI, Services PMI
- CAD: BOC Rate Statement, Overnight Rate
- USD: Factory Orders, Beige Book
EUR/USD has spent the first 2 days of the week in the $1.3125 area. The single currency lacks movement ahead of the ECB’s meeting on Thursday. Tomorrow the pair will generally remain range bound. Negative data will make EUR/USD probe $1.3100, but we don’t expect big decline.
GBP/USD renewed the decline on Tuesday, breaking below the last week’s $1.6530 support. Demand for the pound was hurt by the intensified concerns over the Scottish independence vote on September 20. According to the most recent poll, the gap between the No and Yes vote narrowed to 53% - 47%. Sterling didn’t pay much attention to the strong Construction PMI figure (64.0 vs. 61.5 expected). On Wednesday Great Britain will release Services PMI: the index is expected to weaken from 59.1 to 58.6 in August. We hold a short GBP/USD position with a target of $1.6460.
USD/JPY rocketed to 105.00 yen on Tuesday. The bullish move was inspired by Nikkey growth – Japanese stock market and currency have an inverse correlation. There was a market speculation about a new pension fund governor who’ll invest more funds in Japanese stocks. On Wednesday there are no releases on the Japanese schedule. The market focus will switch to the BOJ policy announcement on Thursday (Sept. 4). Policy is widely expected to remain on hold, but we still remain bullish on USD/JPY with a target of 105.40.
AUD/USD declined to $0.9285 on Tuesday as the Reserve Bank of Australia said that the national currency is overvalued. On Wednesday Aussie’s decline may continue as Australia will likely release lower GDP growth figures. Support is at $0.9250, $0.9235 and $0.9200.