Euro Continues To Rise, USD Remains Weak

Market Reviews

The euro has been growing for the third consecutive session, recovering from last week’s sharp collapse. Released today important data on GDP, inflation and unemployment in the Eurozone were mixed, but this did not stop the growth of the single currency. Eurozone all-item CPI accelerated to 2.1% in July, up from 2.1% yoy and beat expectation of 2.0% yoy. Core CPI also accelerated to 1.1%, up from 0.9% yoy and beat expectation of 1.0% yoy. Eurozone unemployment rate dropped to 8.3%, down from 8.4% and met expectation.

Eurozone GDP growth slowed to 0.3% qoq in Q2, down from 0.4% qoq and missed expectation of 0.4% qoq. Annual growth slowed to 2.1% yoy, down from 2.5% yoy and missed expectation of 2.2% yoy. Germany retail sales rose 1.2% mom in June, above expectation of 1.0% mom. Unemployment dropped -6k in July, below expectation of -10k.

The Canadian dollar rose against the US dollar after the release of strong Canadian data on GDP and producer prices. Canada GDP rose 0.5% mom, 2.6% yoy in May, stronger than expectation of 0.3% mom, 2.3% yoy. IPPI rose 0.5% versus expectation 0.2% mom. RMPI rose 0.5% mom versus expectation of 2.7% mom.

US dollar stays weak after today’s data. US personal income rose 0.4% in June, spending rose 0.4%, both met expectation. However, headline PCE was unchanged at 2.2% yoy, below expectation of 2.3% yoy. PCE core was unchanged at 1.9% yoy, below expectation of 2.0% yoy. Employment cost index rose 0.6% in Q2, below expectation of 0.7%.

Global shares were mixed today. Japan’s Nikkei rose by 0.04%. China Shanghai SSE closed up 0.26%. Singapore Strait Times increased by 0.38%. But Hong Kong HSI fell by 0.52%. FTSE grew by 0.71%, while the DAX dropped by 0.23%. CAC was up 0.19%.