FX.co ★ Finishing acceleration of European currencies

EUR / USD, GBP / USD

On August 1-2, the active growth of the euro and pound is expected before the meeting of the Bank of England.

Unfortunately, the growth of the counter-dollar currencies continues.

German retail sales in June increased by 1.1% against the forecast of 0.1%, while the basic CPI of the euro zone in July grew from 1.1% to 1.2% year on year.

The growth of unfinished sales in June was 1.5% against the forecast of 0.9%.

In the euro area, the final estimates of Manufacturing PMI for July remain expectations unchanged which is 58.3 in Germany and 56.8 for the currency as a whole.

The UK Manufacturing PMI for July is projected to increase from 54.3 to 54.4.

The forecast for US Manufacturing PMI is 56.4 compared to 57.8 earlier, which is very likely to be used against the dollar even with other positive data.

Before the British "super-four", the Bank of England's decision on the monetary policy will be announced along with the publication of the protocols.

USD / JPY

The pessimism of Japanese investors is increasing despite quite favorable conditions for purchases. Industrial production in June increased by 1.6%, although the forecast was slightly higher at 1.7%, the figure is not bad. The volume of new construction for the same month added 1.7% versus the estimate of -0.1%.

In general, orders in construction increased from -0.5% to 2.3% year on year. The index of the manufacturing sector activity decreased from 52.2 to 52.1, but the indicator is supported by good quarterly reports of Japanese companies, which raise today the Nikkei225 by 0.25%. Yesterday, the Chinese Manufacturing PMI showed a decline from 51.7 to 51.4 and Non-Manufacturing PMI decline from 54.9 to 54.5, but today there has been some rehabilitation of the indices. According to Caixin, the PMI index for June increased from 50.4 to 51.1. With this, China A50 grew by 1.03%.

The yen, however, can not recover from the drop since July 26, on the back of the strong weakening of the dollar. But we believe that the external and internal potential is high. Even if the European currency continued to increase, the yen may not fall further and continue trading amid the ranges of 110.00 -111.00.