EUR at 1.23, Following Weak China Data, onto US Data

Aussie jobs data beats expectations, China retail sales at 2-yr lows, No new easing from BoJ; UK trade deficit sharply wider. Market turns to jobless claims and trade balance from the US and Canada. The first part of our dual EURUSD Premium trades hit all targets. For the rest of our Premium Insights on EURUSD, GBPUSD, AUDJPY, gold and oil, see below.

The greenback is stronger across the board except JPY and CAD. European equities are losing around 0.3% and the relative strength winner is JPY.

USDJPY continues to trade in relatively narrow after the BOJ left rates unchanged under 0.1% and did not announce any new easing measures. EURJPY sold off to 96.45 and EURGBP to 0.7863 as the common currency came under pressure across the board.

ECB monthly report showed that the survey of professional forecasters predicts the inflation to ease to 1.7% in 2013 which is below previous expectations of 1.8%. The economy should contract 0.3% in 2012 from previous expectation of 0.2% contraction and growth for 2013 was revised lower to 0.6% from 1%. EURUSD fell from 1.2384 session high to 1.2306.

UK trade deficit widened sharply in June to GBP 10.1 bln from previous GBP 8.4 bln which is the biggest deficit since 9/2011. However, the data is distorted as June lost two working days due to the Queen's Jubilee. Goods exports dropped 8.4% while imports declined only 1.2%. GBPUSD continues to oscillate around 1.5650.

The US session begins at 8:15 am with Canadian housing starts that are seen lower in July at 213K from previous 222K followed by Canadian trade deficit at 8:30 am that is expected to widen to CAD 0.9 bln in June from previous deficit 0.8 bln. Note that Canadian housing starts have doubled since their 2009 low while unemployment is near a 3-yr low

US data is limited to trade deficit at 8:30 am that is anticipated to narrow to USD 47.4 bln in June from May's USD 48.7 bln and jobless claims that analyst predict higher at 371K from previous 365K

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