Investor bought U.S. dollar back after it fell lower from Trump’s comment. However, Fed affirms to hike the interest rate follow the monetary policy in 2018 so dollar rose up against major currencies excepted Japanese yen. Yen firmed after Reuters reported that the Bank of Japan was debating moves to scale back its monetary stimulus and BoJ may hike interest rate from -0.10% to 0.00% for long term. If BoJ change its monetary policy, it will be the first change since 2016. In my opinion, USD/JPY may move lower than support line at 112 points and it may swing in the frame around 111-112 points or if dollar fall lower than 111 yen, it may fall to 110 yen.
Today will release the earning result of second quarter of many big enterprises in the United States such as Coca Cola, Facebook, General Motors, Visa, etc. The most major stock market in Asia including Thailand gained on Tuesday.
According to the decrease existing home sales in June from the shortage of houses in U.S. real estate market, house price rose up the historical high. I think the U.S. new home sales in June which also forecasts lower from the same reason of existing home sale combined with the higher interest rate. However, U.S. dollar may hold steady supporting by Fed monetary policy, bond yield and the recent strong economy. The better inflation and economic growth in Australia may give support to Aussie dollar to decline the local bearish trend of AUD/USD so Aussie dollar may try to hold above 0.7350 points. But if it falls lower than 0.7350, it may drop to 0.7320 points.
Economic indices in focus:
• Australia: CPI (Q2) at 08.30 a.m.
• Germany: Business Climate Index at 15.00 p.m.
• USA: New home sales (Jun) at 21.00 p.m. and Crude oil inventories at 21.30 p.m.
By Niramon Nitnitiphruet
Financial analyst, Olymp Trade.