Retail Sales Boost Buck, Latest Premium Insights on USDJPY & EURJPY

USD/JPY rose to the highest in nearly a month after July US retail sales data beat estimates. On the day, the Canadian dollar was the best performer while the yen lagged. Australian reports on consumer confidence and wages are the highlight of Asia-Pacific trading. Latest Premium Insight focuses on the relationship between USD and JPY and EURJPY.

US retail sales climbed 0.8% in July compared to the +0.3% reading expected. The gains were broad based unaffected by volatile auto and gas figures. The impact was slightly negated by a downward revision to June figures to -0.7% from -0.5% but markets were encouraged.

The US dollar jumped to 78.94 against the yen the highest since mid-July. The Canadian dollar also benefitted from its proximity to the US.

In Europe, rumors circulated that Spain would ask for a bank bailout tranche this week but that seems unlikely with a holiday on Wednesday. The EUs Rehn also said Spain had not asked for EFSF funds but that the funding-strained country was keeping an open mind.

Second-tier data painted a less-optimistic picture. IBD/TIPP US optimism fell to the lowest since December and weekly retail sales data from Redbook and ICSC declined.

Broad US dollar strength was the theme of the session as the euro, Australian dollar and gold all declined. Stocks closed slightly higher.

The focus in Asia shifts to Australian consumer confidence from Westpac at 0030 GMT. The July survey climbed 3.7% to 99.1. An hour late, Australian releases the wage cost index for the second quarter. A 3.5% y/y rise is expected.

Latest Premium Insight focuses on the relationship between USD and JPY and EURJPY. Direct access is found here: http://ashraflaidi.com/products/sub01/access/?a=674 To Subscribe, please click here: http://ashraflaidi.com/products/sub01/

-AB