Dollar marks time in Asia as traders consider a busy data week

Traders scale back activity ahead of data/event rush

A busy data week culminating in the monthly US jobs report and approaching month-end all conspired to keep traders in Asia sidelined and currencies range-bound at the start of the week. Traders were also mulling the aftermath of US GDP data release on Friday which showed the US economy growing 4.1% on an annualized basis in Q2. The US dollar struggled to get any kind of lift from the strong data as analysts and commentators immediately looked towards Q3 numbers, which are expected to be nowhere near as buoyant. That didn’t stop US Treasury Secretary Mnuchin from saying that he believed the US economy could sustain growth of at least 3% for the next 4-5 years.

Dollar Mixed Ahead of Busy Week in the Market

Japan retail spending ticks up as BOJ meets

The only data releases in Asia were second-tier. Retail trade in Japan rose 1.8% y/y, above economists’ forecasts of a 1.6% gain while large retailers’ sales posted positive growth for the first time in three months. USD/JPY was mostly steady, rising 0.09% while EUR/JPY gained 0.04%. AUD/USD was mostly sidelined, holding close to the 0.74 handle with a slide of 0.13% to 0.7391.

Gold continues to hover near one-year lows as latest data from Chicago shows speculative investors reduced their net long gold positions in the week to July 24. Oil prices extended Friday’s slide, easing down to $69.50

See the MarketPulse data calendar here:

Markets on Central Bank watch

The Bank of Japan starts its two-day meeting today, the first of many to follow during the week. There is mounting speculation that the BOJ will discuss an adjustment to its JGB target rates and possibly scaling back its investments in ETFs that track the Nikkei. When it comes to old-fashioned monetary policy, analysts are unanimous in their view that there will be no change in rates, with the possibility of allowing the 10-year JGB yield to move above zero percent, which is its current target level. The 10-year yield is trading at 0.11% today and notably has held above 0% since September last year.

The Bank of England is seen hiking rates by 25 bps to 0.75% even though inflation appears to be on a downward tack and data fails to be convincing while the FOMC is not expected to result in any rate changes, more a confirmation that a September hike is still very much on the cards. The Reserve Bank of India is also expected to increase its benchmark rate while Brazil’s central bank is seen standing pat.

Japan 10-Year JGB Yield Chart

Source: Bloomberg (

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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