The latest developments suggested Iraq is now looking for a new cabinet, with President Obama’s endorsement also being taken positively. There were also suggestions that Russia was withdrawing its troops from the eastern Ukraine border. However, NATO actually came out and said there are no signs of this happening and there is a high probability Russia could intervene in eastern Ukraine still. Perhaps this is why risk currencies haven’t seen any gains just yet.
AUD/USD is just holding on to 0.926 where it has been sidelined for the past four sessions. The currency finally saw a bit of a pop this morning on the back of some positive economic data. The NAB business confidence and conditions surveys showed a strong bounce from the previous month. The house price index also showed a much better-than-expected 1.8% reading, beating estimates of around 1% growth. Credit card purchases also climbed in June, while balances retreated a touch.
Following the bearish tone that had been set by last week’s jobs numbers, this data was well received today. AUD/USD bounced a touch following the data, but hasn’t been too inspiring since. I still maintain my inclination towards selling the pair into the 0.932 region.
Euro in focus ahead of ZEW readings
The single currency has lost its grip on the 1.3400 handle against the greenback. There was no data to provide any solid direction in Europe, but today we have the ZEW economic sentiment readings for Germany and the region to look out for. A sharp fall is being forecast for both readings and this is possibly why we are already seeing some downside in the single currency. Should this data miss estimates, then a retest of this month’s lows in the 1.333 region could occur.