Forex Focus: Dollar Strength and Market Movements in Asia

Dollar strength and market movements in Asia. Key U.S. session events, inflation trends, currency moves, and market outlook.

What Happened in the U.S. Session?

In June, U.S. retail sales were flat, maintaining a total of $704.3 billion. Key contributors were non-store retailers, building materials, garden equipment, and health and personal care stores. This result exceeded forecasts of a 0.3% decline, reflecting steady sales growth in Q2 2024. May’s sales growth increased from 0.1% to 0.3% month-on-month (MoM).

The dollar index (DXY) initially surged from 104.21 to 104.51 on the back of these better-than-expected figures but fell back to around 104.20 by the session’s end.

What Does It Mean for the Asia Session?

New Zealand: New Zealand’s Q2 inflation rose by 0.4% quarter-on-quarter (QoQ), lower than the 0.5% estimate, and it marked the lowest reading since Q2 2020. The annualized inflation rate slowed to 3.3%, below the 3.5% forecast. Despite cooling, inflation remains above the Reserve Bank of New Zealand’s (RBNZ) target of 1-3% YoY. The Kiwi dollar initially dropped from 0.6050 to 0.6033 but spiked to 0.6079 this morning.

Key News Events Today:

• Industrial Production (1:15 pm GMT)
• Fed Gov Waller Speaks (1:35 pm GMT)

Forex Focus: Dollar Strength and Market Movements in Asia

The Dollar Index (DXY): June’s industrial production is expected to grow by 0.3% Month over Month after a strong 0.7% increase in May. This could support the dollar. Fed Governor Christopher Waller’s speech might induce volatility.

Next 24 Hours Bias: Weak, Bullish

Gold (XAU): Industrial production growth might pressure gold prices downward, and Fed Gov. Waller’s speech could also create volatility.

Next 24 Hours Bias: Weak, Bullish

Australian Dollar (AUD): The Aussie stabilized after hitting a low of 0.6414. With no major news events today, it could edge higher.

Support: 0.6715 | Resistance: 0.6790 Next 24 Hours Bias: Weak Bearish

Kiwi Dollar (NZD): New Zealand’s inflation data suggests the Kiwi could see continued bullish momentum.

Next 24 Hours Bias: Strong Bullish

Japanese Yen (JPY): BoJ’s intervention has strengthened the yen, with USD/JPY trading around 158.45 as the Asia session begins.

Support: 157.70 | Resistance: 159.40 Next 24 Hours Bias: Weak Bullish

Euro (EUR): June’s final CPI reading is expected to remain unchanged, but a higher-than-expected print could boost the Euro.

Next 24 Hours Bias: Weak Bearish

Swiss Franc (CHF): USD/CHF drifted lower, trading around 0.8940 as the Asia session started.

Support: 0.8920 | Resistance: 0.8970 Next 24 Hours Bias: Weak Bullish

Pound (GBP): UK inflation forecasts suggest a marginal decline. Stronger-than-expected cooling could pressure GBP/USD.

Next 24 Hours Bias: Weak Bearish

Canadian Dollar (CAD): USD/CAD stabilized around 1.3680, with potential for a resumed downtrend.

Support: 1.3660 | Resistance: 1.3710 Next 24 Hours Bias: Weak Bullish

Oil: API crude stocks fell by 4.4M barrels, but concerns over Chinese demand pressure prices. WTI stabilized at around $80.50, with an aim of $81.

Next 24 Hours Bias: Medium Bearish

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