Investors get dollar cravings … (+ video)

   
With the US Federal Reserve’s July meeting now behind us, investors will turn their attention to the US’s macroeconomic data and the US’s Q2 GDP. Despite the weaker data and a more dovish Fed meeting, investors seem to have a big appetite for dollars.
 
The Greenback rose against all major currencies, despite disappointing data, which seems to indicate that investors are anticipating a lift-off in September. Q2 GDP figures came in weaker than the market anticipated at 2.3%, against consensus of 2.5%. In the Fed’s monetary statement this week, it hinted that it wants to see some additional improvement in the job market. Expect the next two non-farm payrolls to be examined in microscopic detail.
 

… but euro has too much Greece
 
In Europe, the macroeconomic data out of Germany and Spain didn’t do much for the euro. Confidence indicators for the Eurozone were generally encouraging – Germany’s July CPI reading came in line at 0.2%, and in Spain we saw Q2 GDP reading print in line for the quarter at 1%. Even so, the euro was sold off as the market turned its attention to Greece.
 
Various newswires are reporting that the International Monetary Fund will not participate in a third bailout unless Europe gives Greece debt relief. Greek Finance Minister Euclid Tsakalotos will meet representatives of the so-called Troika of Greece’s creditors (the IMF, the EU and the European Central Bank) in Athens today (31 July).

 
News from elsewhere
 
Today the market will be busy, with the release of Germany’s June retail sales figures, France’s Producer Prices Index and consumer spending data, Italy’s unemployment data, the Eurozone’s aggregate unemployment numbers. In the US the focus will be the Q2 Employment Cost Index and the Chicago Purchasing Managers’ Index (PMI).
 
Over the weekend, the market will look at the official manufacturing and non-manufacturing PMI data in China.
 
Have a fantastic weekend.

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