Ukraine Tensions Boost Demand for USDAugust 06, 2014 Posted by: Joe O'Leary
Overnight markets traded poorly and the demand for the USD rose as tensions continued to rise in Russia. A NATO spokesperson commented on the risks of the military buildup on the Ukrainian border, triggering further selling across risk assets. The yen advanced as a haven against most of its 31 major peers after NATO said Russia may send troops into Ukraine under the “pretext” of a humanitarian or peacekeeping mission. The New Zealand dollar dropped for a second day after Statistics New Zealand said employment increased 0.4 percent in the second quarter. The European Central Bank meets tomorrow with most economists surveyed by Bloomberg News forecasting that it will hold its refinancing rate at 0.15 percent. Analysts also forecast the ECB will maintain its negative deposit rate. The ruble dropped as Vladimir Putin ordered his government to prepare a response to U.S. and European sanctions, while massing forces on its neighbor’s border. INR drops as foreign investors pare local asset holdings.
• The US June trade deficit narrowed to $41.5 bln (median -$44.3 bln) after the upwardly revised $44.7 bln
• The Canada's trade surplus widened to C$1.9 bln in June after a revised C$0.6 bln surplus for May (previously -C$0.2 bln).
• German manufacturing orders plunged 3.2% m/m in June, after already falling 1.6% m/m in the previous month.
• Eurozone June retail sales rose 0.4% m/m, slightly less than anticipated.
• Italy Q2 GDP unexpectedly fell -0.2% q/q, against expectations for a rise of 0.1% q/q, after the contraction in the first quarter. This means the Eurozone's third largest economy fell back into recession.
08/07 GBP: Bank of England Rate
08/07 USD: Initial Jobless Claims (Aug 2)
08/08 CAD: Unemployment Rate (July)
08/08 JPY: Consumer Confidence Index
08/08 USD: Whole Sale Inventories (June)
08/10 RUB: Russian Trade Balance (June)
08/11 CAD: Housing Starts(July)
08/11 JPY: Japan PPI(July)
08/11 USD: US Mortgage Delinquencies(Q2)
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