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Dollar Recovers after Personal Income and Spending, But Still the Worst Performer

Dollar recovers mildly in early US session, following slight weakness in risk sentiments. Additionally, stronger than expected personal income and spending are providing some support too. Still, the greenback remains the worst performing one for the week. There is prospect of Yen, Aussie or Kiwi overtaking Dollar as biggest loser, but we’ll see. Meanwhile, Sterling is staying as the strongest one, followed by Swiss Franc.

Technically, the rally is EUR/USD is a bit disappointing as it still couldn’t get rid of 1.1880 resistance cleanly. At the same time, Gold also appears to rejected by 1833.91 resistance too, as it fails to resume rise from 1750.49. The greenback sellers might retreat for now and wait for another chance next week.

In Europe, at the time of writing, FTSE is down -0.72%. DAX is down -0.68%. CAC is up 0.02%. Germany 10-year yield rose 0.0035 to -0.443. Earlier in Asia, Nikkei dropped -1.80%. Hong Kong HSI dropped -1.35%. China Shanghai SSE dropped -0.42%. Singapore Strait Times dropped -0.43%. Japan 10-year JGB yield dropped -0.0018 to 0.020.

US PCE price index unchanged at 4% yoy in Jun, core PCE rose to 3.5% yoy

US personal income rose 0.1%, or USD 26.1B in June, better than expectation of -0.4% contraction. Personal spending rose 1.0%, or USD 155.4B, above expectation of 0.7%.

Headline PCE price index was unchanged at 4.0% yoy. Core PCE price index accelerated to 3.5% yoy, up from 3.4% yoy, but missed expectation of 3.7% yoy.

Canada GDP contracted -0.3% mom in May, to recover 0.7% in Jun

Canada GDP contracted -0.3% mom in May, matched expectations. Total economic activity remained approximately -2% below prepandemic level in February 2020. Overall, 12 of 20 industrial sectors contracted, with services-producing down -0.2% and goods-producing down -0.4%. Preliminary information indices that GDP would grow 0.7% in June, and 0.6% in Q2.

Eurozone GDP grew 2.0% qoq in Q2, EU up 1.9% qoq

Eurozone GDP grew 2.0% qoq in Q2, well above expectation of 1.5% qoq. EU GDP grew 1.9% qoq. Among the Member States for which data are available for the second quarter 2021, Portugal (+4.9%) recorded the highest increase compared to the previous quarter, followed by Austria (+4.3%) and Latvia (+3.7%), while Lithuania (+0.4%) and Czechia (+0.6%) recorded the lowest increase. The year on year growth rates were positive for all countries.

Eurozone unemployment rate dropped to 7.7% in June, down from 8.0%, better than expectation of 7.9%. EU Unemployment rate dropped to 7.1%, down from 7.3%. Eurostat estimated that 14.916m people were unemployment in EU, of whole 12.517m in the Eurozone.

Eurozone CPI rose to 2.2% yoy in July, up from 1.9% yoy, above expectation of 2.0% yoy. Energy is expected to have the highest annual rate in July (14.1%, up from 12.6%), followed by food, alcohol & tobacco (1.6%, up from 0.5%), services (0.9%, up from 0.7%) and non-energy industrial goods (0.7%, down from 1.2%).

Germany GDP grew 1.5