ForexLive Asia-Pacific FX news wrap: USD/JPY ticked back above 161.50 – ForexLive

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Let’s get the politics out of the way first. Speculation intensified that US Vice President Harris will replace US President Biden on the ticket for the November election, fuelled by the news that Biden and Harris will be sitting down to a private lunch together on Wednesday. Biden will meet with state Democratic Governors in the evening. EUR/USD ticked a few points lower at the time of this news crossing. Whether correlation is causation is the question. Had me scratching my head anyway.
USD/JPY dribbled higher around the same time, but hey, a weak yen is not news.
On the data front it was an active session.
Japan’s June Services PMI collapsed from 53.8 in May to 49.4 in June. Its first move into contraction in two years. This, of course, could go some way to explaining the weaker yen during the session.
From China we had the Caixin June Services PMI come in lower from May also. It remained in expansion though.
Retail sales data from Australia came in at a very solid beat indeed, at +0.6% m/.m vs. +0.2% expected. The Australian Bureau of Statistics were quick to dismiss the rise, citing consumers responding to discounting. Most analysts were the same. I am not buying these explanations. The employment market is still very strong, and we’ve just had a round of solid tax cuts (these hadn’t kicked in in May but folks knew they were coming), so maybe better retail sales are just … better retail sales. These will not prompt an RBA rate hike in and of themselves, but if the RBA is leaning to a hike to combat steady and perhaps rising inflation, the sales figures will not stand in the way.
The private oil inventory survey showed a huge draw, much higher than the consensus expectation. Official inventory figures will hit on Wednesday morning US time.
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