The euro hit a record high against the Yen this morning while the dollar inched towards a two months low against the euro as investors continued to trade on gaps in interest rates. Early today the euro climb at 148.60 high against Yen, it??™s strongest since January 1999. The Gbp spiked down against usd and eur after British police said they had stopped a terrorist plot to blow up aircraft in mid-flight. The Jpy is still least attractive as the Bank of Japan is expected to hold rates at 0.25 percent at the end of a two day policy meeting on Friday. On the contrary, Euro could have another interest rate hike in the near future. The dollar has shown some resilience in the wake of FOMC decision to hold rates at 5.25 percent, but with ECB and BoE likely to keep rising rates; the dollar would keep hitting lows in the near futures. Last night, the high yield NZD boosted after data showed that the country added much greater than expected 22k jobs in 2nd quarter, which was likely to reinforce expectations of steady rates at 7.25 percent this year.
Todays Key Issues:
All focus goes to US June Trade Balance expected -$64.4B vs -$63.8B. At same time, will see US (August 5th) Initial Jobless Claims expected 315k unchanged. Next night is Japan Growth Domestic Product QoQ and annualized (2nd Quarter) respectively expected 0.5% vs 0.8% and 1.8% vs 3.1%.
The Risk Today:
Most awaited numbers could shake Gbpusd out of his actual range 1.8980 to 1.9090. Worse than expected number will push down the Dollar against GBP and Eur. Going down, Gbpusd target is 1.9195 and 1.9300. Respectively Eurusd will hit 1.2950 and 1.2982 key level. Major supports are active at Gbpusd 1.8850 and Eurusd 1.2745. Jpy may test support 114.65. Short term UsdJpy resistance is still 115.30 and was already tested this morning 115.40 high.
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