The yen moved slightly lower after the Japanese statistics office released the preliminary reading of the second quarter GDP data. Numbers showed that the economy expanded by 1.8%. This was higher than the consensus estimates of 0.4% but lower than the 2.2% growth in the first quarter. On a QoQ basis, the economy grew by 0.4%, which was slightly higher than the expected growth of 0.1%. The capital expenditure increased by 1.5% while the GDP external demand declined by -0.3%. Private consumption increased by 0.6%. These numbers came a day after the country released the current account data. In June, the adjusted current account rose to Y1.94 trillion. Meanwhile, in China, consumer prices increased by 2.8% in July while PPI declined by -0.3%.
Sterling was relatively unchanged ahead of important data from the UK. The country will release the GDP, industrial, manufacturing, and trade data. The market expects that the economy grew by 1.4% in the second quarter, which will be slightly lower than the 1.8% growth in the first quarter. On a QoQ basis, they expect the economy to have remained unchanged. The manufacturing production is expected to have declined by -1.1% on a YoY basis and -0.1% on a monthly basis. The industrial production has declined by -0.2%. On trade, the market expects the trade deficit to have increased to 11.80 billion pounds.
From the United States, the market will receive the PPI data. The PPI is expected to have remained unchanged at 1.7% in July. On a MoM basis, the PPI is expected to have increased slightly to 0.2%. In Canada, the unemployment rate and participation rate are expected to have remained unchanged at 5.5% and 67.5% respectively. The economy is expected to have added 12.5k jobs. In Germany, investors will receive trade data, with the trade surplus expected to decline slightly to EUR 18.5 billion.
The EUR/USD pair moved up slightly in the Asian session. As of this writing, the pair is trading at 1.1193, which is about 20 pips from the US close. On the hourly chart, the consolidation has made the price trade along the 50-day and 25-day EMAs while the RSI has remained at the ‘neutral’ level of 47. As shown in the chart below, the pair has been trading within the narrow channel of 1.1165 and 1.1250. The pair will likely remain inside the channel today.
The USD/JPY pair moved up slightly after Japan released Q2 GDP data. The pair is trading at 105.98, which is slightly higher than the weekly low of 105.50. As a result of the consolidation, the pair is trading slightly below the 50-day and 25-day moving averages. With this consolidation, it means that the pair could breakout in either direction.
The AUD/USD pair was relatively unchanged in the Asian session and is currently trading at 0.6806, which is close to the 38.2% Fibonacci Retracement level on the hourly chart below. The price is slightly above the short and medium-term moving averages while the RSI has moved to above 55. The momentum indicator remains above 100. This means that the pair could continue moving higher to test the 50% Fibonacci level at 0.6880.