EURUD Tests its 55 DMA

EURUSD at its 55-dma for the first time in 3 months, while stocks at new 3-months highs. RBA keeps rates steady; UK manufacturing production falls; German factory orders disappoint; Swiss CPI. Market turns to Canadian PMI and building permits and NIESR estimate for UK GDP.

USD weaknes anew against most majors and European equities are trading within -0.15% to 0.75% range.

AUDUSD pushed higher above the 1.06 figure after the RBA held rates steady at 3.5% and further dampened expectations for further tightening. The statement was balanced and predictable, noting that monetary policy was appropriate and that the global outlook is more subdued than a few months ago. AUDUSD then fell back to 1.0570s and continues to struggle with the 1.06 handle.

UK manufacturing data worsened but still came in above expectations which helped to push GBP higher. Both industrial and manufacturing production dropped 4.3% in June from previous -1.8% y/y. GBPUSD rose from 1.5575 to 1.5630 and continues to traded firmly above the figure.

EURUSD did not respond to disappointing German factory orders that declined 1.7% in June after growing 0.7% in May but EURGBP fell to a session low around 0.7933 where it continues to trade.

Swiss monthly deflation intensified as CPI declined to -0.5% in July from previous -0.3%. However, the annual figure rose to -0.7% from previous -1.1%. Yesterday's spike on EURCHF from 1.2012 to 1.2083 was not erroneous and EBS confirmed that the trade was valid.

Reports during the US session are limited to Canadian building permits at 8:30 am ET that are expected to drop 3.5% in June after rising 7.4% in May followed by Ivey PMI at 10:00 am that is seen higher at 52.0 in July from previous 49.

GBP could respond to NIESR UK GDP estimate for July that is also due at 10:00 am. For June the figure was -0.2%.