The Australian dollar rose slightly as investors reacted to the disappointing data from Australia and China. In Australia, data from the Bureau of Statistics showed that building capital expenditure fell by 4.4% in the second quarter. It was a worse decline than in the first quarter decline of 1.1%. Construction capital expenditure decreased by 7.6%, while private new capital expenditure decreased by 5.9%. Other data from China showed that industrial profits increased by 19.6% in July after increasing by 11.50% in June. Profits fell by 8.1% from January to July.
The US dollar index fell during the Asian session as investors await an important speech from the Federal Reserve President at the Jackson Hole summit. In the speech, Jerome Powell will talk about the state of the US economy and possibly reveal the bank’s plans to support the economy. The talk comes a day after the US released strong new home sales data. It also comes a few hours after the second reading of GDP data in Q2. Analysts expect the data to show that the economy grew by 32.5% in the second quarter after contracting by 5.0% in the first quarter. We also receive the original and persistent number of unemployed claims.
The economic calendar will have some important data from Europe today. In Switzerland, the Federal Bureau of Statistics releases GDP data for the second quarter. Analysts expect the data to show that the economy grew by 9.6% and 8.6% year-on-year and quarter-on-quarter, respectively. This after the economy weakened by 1.3% and 2.6% in the first quarter. In Sweden, the statistics agency releases retail sales, factory confidence and trade data. Meanwhile, the statistics office releases the Italian sales figures for the industry.
EUR / USD
The EUR / USD pair is trading at 1.1831, which is slightly above yesterday’s low level of 1.1770. On the daily chart, the pair is still above the 50-day and 100-day exponential moving averages. The average true range (ATR) has also fallen, which is a sign of low volatility. Meanwhile, the pair is in consolidation, as shown with the white rectangle. Therefore, the pair is likely to remain calm during the European session as traders wait for news from the Fed.
AUD / USD
The AUD / USD pair changed slightly following the mixed data from Australia and China. It trades at 0.7235, which is just over 50-day and 100-day EMAs on the four-hour chart. The price is also slightly below the YTD high of 0.7280. The MACD signal and the main line and the power index are moving above the neutral line. Therefore, the couple is likely to remain within the current range before Jerome Powell’s speech.
USD / CHF
The USD / CHF pair has changed slightly and is trading at 0.9078, which is slightly above this month’s low of 0.9010. On the daily chart, the price is below the short and long-term moving averages. The MACD’s signal and main line have started to move upwards, while the average true range (ATR) has fallen. Therefore, the pair is likely to continue to decline when bears target the next level of 0.9050.