FX.co ★ Markets are Waiting for Instructions About the Nuclear Test by North Korea

EUR / USD, GBP / USD

As the Americans are not present in the markets due to the national holiday, investors have not yet make a decision regarding the necessary action towards the nuclear testing by the North Korea. At the end of the day, the euro gained 35 points. In relation to the renminbi, the euro is now trading near the Friday's close. The Eurozone Sentix Investor Confidence index for September increased from 27.7 to 28.2, but the number of unemployed in Spain over the past month increased by 46.4 thousand against expectations of 16.3 thousand in the UK. The business activity index in the construction sector in August decreased from 51.9 to 51.1, which led the pound to decline by 16 points yesterday.

Agencies including Bloomberg, Reuters, and Deutsche Bank, simultaneously expressed their opinions that during the ECB meeting on Thursday, the central bank will not provide any hints regarding the correction of monetary policy, such statement will be made only in October. The only question is that whether the higher rate of the euro will be mentioned. Today, the final evaluation of the Euro zone's PMI Services for August will be released, which shows unchanged figures expected at 54.9. The retail sales volume in the region for July is projected to decrease by 0.2%, and the annualized growth declined from 3.1% YoY to 2.5% YoY. In the United Kingdom, services PMI is projected to decrease from 53.8 to 53.5.

While the macroeconomic index of the United States also worsens, as the volume of production orders for July reached -3.1 / -3.3%. Moreover, FRS member Lael Brainard is scheduled to have her speech regarding the monetary policy in New York.

We are expecting for the euro to decline to 1.1770 and further to 1.1660, while the pound sterling at 1.2850 and further to 1.2755.

AUD / USD

This morning, the Australian dollar traded in the range of August 28, Monday. The confidence was caused by the Chinese indicators of business activity in the service sector from Caixin, with the August estimate at 52.7 against 51.5 in July. In Australia, AIG business activity index fell from 56.4 to 53.0. While the balance of payments for the 2nd quarter shows that figures were 9.6 billion dollars against the forecast of 8.1 billion. During the first quarter, it only gained 4.8 billion dollars, as net exports for the quarter increased by 0.3%.

At 5:30 PM London time, the RBA announced a decision on monetary policy. As expected, no changes occurred. There was also no clear concerns regarding the high exchange rate of the Australian currency. The head of the Central Bank, P. Lowe, optimistically noted the broad growth of the economy. The main problem was allocated by weak consumption, high crediting and low growth of wages.

Tomorrow in Australia, the GDP for the 2nd quarter is projected to 0.8% against 0.3% earlier. On Thursday, the retail sales and the trade balance for July will be released. The forecast for both indicators are good, showing 0.2% on Retail Sales and 0.95 billion vs. 0.86 billion on Trade Balance.

Probable lateral trade in the range of 0.7870-0.7965 despite the evident decline in the euro and the British pound.