The dollar has traded moderately softer, though the main pairings have remained well within the respective ranges of yesterday. EUR-USD lifted to a high of 1.0962, and USD-JPY dipped to a low of 123.90. An unexpected dip in German retail sales, which dove 2.3 % in June versus the Reuters median for 0.3% growth, helped put a cap on the euro. BoJ sources cited by Reuters, meanwhile, said that a weak yen is beneficial for the economy, and that the central bank is happy with a declining currency, so long as the pace remains moderate. NZD-USD ebbed, although the pair remained above its low from yesterday, on ANZ business confidence data, which dove to -15.3 from -2.3, a six-year low.
[EUR, USD]
EUR-USD lifted to a high of 1.0962 before an unexpected dip in German retail sales, which dove 2.3 % in June versus the Reuters median for 0.3% growth, put a cap on the euro. EUR-USD resistance is at 1.0984-96, which encompasses the convergence of the 20- and 100-day moving averages. Support is at 1.0890-1.0900.
[USD, JPY]
USD-JPY dipped to a low of 123.90. An unexpected dip in German retail sales, which dove 2.3 % in June versus the Reuters median for 0.3% growth, helped put a cap on the euro. BoJ sources cited by Reuters, meanwhile, said that a weak yen is beneficial for the economy, and that the central bank is happy with a declining currency, so long as the pace remains moderate. Japan's CPI report showed very modest June core growth alongside a surprise drop in Tokyo core CPI during July. National core CPI grew at a 0.1% y/y pace in June, matching the growth rate in May and coming in slightly firmer than expected. The core grew at a 0.3% y/y clip in April. The contrasting Fed versus BoJ policy paths should keep USD-JPY biased higher in the bigger picture. We anticipate a re-visit to the Jun-5 peak at 125.85.