Daily FX Update, 23 July 2015

v  US ‘s existing home sales increase 3.2% m/m in June v  BoE MPC shows a number of members consider to vote for a rate hike, but held off due to uncertainty in Greece v  Japan's all industry activity index declines in May v  MNI China Business Sentiment Indicator slip to 48.8 in July v  Taiwan's seasonally adjusted unemployment rate rise slightly to 3.76% in June

·         US – Existing home sales increased 3.2% m/m in June to an annualised pace of 5.49 million – the highest level in eight years. This report together with last week housing data suggests that activity in the US housing market continues to strengthen.

·         UK – While the Bank of England’s MPC Minutes showed a unanimous 9-0 vote, a number of members are edging towards voting for a rate hike, but stayed their hand due to international uncertainty. The Minutes revealed that for the members who were considering voting for a rate hike, “the uncertainty caused by recent developments in Greece was a very material factor in their decisions: absent that uncertainty, the decision between holding bank rate at its current level versus a small increase was becoming more finely balanced”.

·         Currency – USD reversed its weakness as housing data continued to perform well. AUD and NZD remained weak as commodities and equities declined, though the RBNZ is currently causing a NZD short-squeeze.

·         Equity – Equities remained under pressure as disappointing earnings results from Apple, Microsoft and Yahoo weighed on sentiment. The NASDAQ underperformed by 0.7%.

·         Rate – 10-year US treasuries rallied marginally, shrugging off the better than expected existing home sales data.

·         Energy – WTI prices came under pressure post the EIA weekly US crude oil inventory announcement. The EIA report showed that stockpiles increased by 2.5 million bbl against market expectation of decline by 1.5 million bbl due to increasing imports as the Brent/WTI spread has narrowed.

Precious Metal – Gold failed to hold above US$1,100. The 5% fall in the gold price in the last week has pushed investor confidence in gold miners to a new low. 

INDICATIVE MAJOR CURRENCIES Last Close  8.05 am Snapshot        Bid                   Offer Expected Ranges for Today         Low                       High USD/MYR 3.7938 3.7870 3.8210 3.7850 3.8300 JPY/MYR (100) 3.0578 3.0490 3.0810 3.0400 3.1000 SGD/MYR 2.7765 2.7670 2.8000 2.7600 2.8200 EUR/MYR 4.1364 4.1380 4.1720 4.1100 4.2100 AUD/MYR 2.7968 2.7850 2.8190 2.7700 2.8400 GBP/MYR 5.9161 5.9210 5.9550 5.8900 6.0100 USD/JPY 124.07 123.89 124.30 123.49 124.49 EUR/USD 1.0903 1.0770 1.1080 1.0870 1.0980 AUD/USD 0.7372 0.7210 0.7520 0.7320 0.7420