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Dollar Dropped On The Weak Data. Dollar slid after downbeat U.S. economic data, the lack of resolve from the FOMC and Trump's fallout. The building permits and housing starts figures tumbled as survey revealed that homebuilders are finding it more difficult to find skilled workers to complete the jobs and that the rising cost of materials is also weighing on profitability. After the release of the FOMC minutes dollar bulls were disappointed to find out that Fed officials were still unable to set a date for the runoff. Adding salt to the dollar's wounds was the fallout from Trump's response to the events in Charlottesville.

CAD Rallies As Fed Minutes And Trump Pressure USD. The Canadian dollar rebounded against greenback from a one-month low hit the day before, driven by a broad-based retreat in the U.S. dollar on the back of Federal Reserve concerns over inflation.

Oil Falls On Glut Concerns. Crude oil tumbled nearly 2% as the Energy Information Administration's latest report showed that US domestic production hit its highest level in two years. Market participants have been concerned that rising production in North America will continue to counterbalance OPEC and Russia's efforts to freeze output to support oil prices.

Asia Summary

Asian equity markets opened mixed before falling to the downside, again the stand out is the Kospi rising 0.5%. Fed meeting minutes weighed on the dollar in the session, as the outlook on inflation remains subdued. South Korea President Moon affirmed that nothing would happen with North Korea without South Korea’s approval. Onshore yuan gained over 0.3%, the largest advance in 1-week after China govt data showed that outflows have eased. The USD/CNY had its first strengthening in 3 days by 0.1% to 6.6709. Market had little reaction the Japan trade figures, most of Japan, including the Nikkei, has been under pressure from the stronger yen. Australia employment figures gave some strength to the A$ before giving most of it back later in the session. In Australia Telstra reported results and suspended its dividend reinvestment plan, sending the stock down over 8%, this weighed on the ASX200 of which it is a major component. Earnings continue to ramp up in China and Hong Kong with property and retail names showing positive results, tech players will look ahead to Lenovo, reporting on Friday.

Key economic data

(AU) AUSTRALIA JULY EMPLOYMENT CHANGE: +27.9K V +20.0KE (5TH CONSECUTIVE INCREASE); UNEMPLOYMENT RATE: 5.6% V 5.6%E

(NZ) NEW ZEALAND Q2 PPI INPUT Q/Q: 1.4% V 0.8% PRIOR; PPI OUTPUT Q/Q: 1.3% V 1.4% PRIOR

(JP) JAPAN JULY TRADE BALANCE: ¥418.8B V ¥327.1BE; ADJ TRADE BALANCE: ¥337.4B V ¥195.3BE

(SG) SINGAPORE JULY NON-OIL DOMESTIC EXPORTS M/M: -2.5% V -0.4%E; Y/Y: 8.5% V 9.1%E; ELECTRONIC EXPORTS Y/Y: 16.3% V 15.0%E

(PH) PHILIPPINES Q2 GDP Q/Q: 1.7% V 1.9%E; Y/Y: 6.5% V 6.4%E

(AU) Australia Jul RBA Govt FX Transactions (A$): -1.03B v -1.12B prior

Speakers and Press

China/Hong Kong

(CN) China Hebei province to meet capacity cutting targets by end of September - Chinese press

(CN) China National Development and Reform Commission (NDRC): expect prices to be stable in H2

Korea

(KR) South Korea President Moon: Critical to address minimum wage and stability in housing; Only S Korea can decide any military option on peninsula - 100 day press conference

Taiwan

(TW) Taiwan planning to reshuffle cabinet in Sept - Taiwan press

Asian Equity Indices/Futures (00:00ET)

Nikkei -0.1%, Hang Seng -0.1%, Shanghai Composite +0.4%, ASX200 0.0%, Kospi +0.5%

Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.1%, FTSE100 +0.1%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.1790-1.1765; JPY 110.16-109.66; AUD 0.7949-0.7922; NZD 0.7330-0.7303

Dec Gold +0.8% at $1,292/oz; Sept Crude Oil +0.3% at $46.91/brl; Sept Copper +0.3% at $2.97/lb

USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT: 6.6709 V 6.6779 PRIOR

(CN) China PBoC OMO injects CNY100B v CNY280B in 7 and 14-day reverse repos; injects net CNY50B v CNY180B prior

USD/PHP (PH) Philippines Economic Planning Sec Pernia: See no reason for concern on peso, its unlikely to gyrate wildly, will curb volatility

JGB (JP) Japan MoF sells ¥4.38T v ¥4.4T offered in 3-month bills; avg yield -0.1275%; bid-to-cover 5.21x

JGB (JP) Japan MoF sells ¥1.81T v ¥2.2T offered in 0.1% JGBs; avg yield -0.0830%; bid-to-cover 4.46x

Equities notable movers

Hong Kong/China

Tencent, 700.HK Reports Q2 (CNY) Net 18.2B v 13.5Be, Rev 56.6B v 52.9Be; +5.3%

Cathay Pacific, 293.HK Reports Q1 (HK$) Net -2.1B (1st loss in ~20-yrs) v -1.2Be; Rev 45.9B v 45.7B y/y; +1.5%

Australia

Telstra, TLS.AU Reports FY17 Net A$3.89B v A$3.82Be; EBITDA A$10.7B v A$10.5B y/y; Rev A$26.0B v A$26.7B y/y; suspends dividend reinvestment plan; -8.5

Godfreys,GFY.AU Reports FY17 Underlying Net A$5.9M v A$9.2M y/y; EBITDA A$14.1M v A$17.5M y/y; Rev A$174.1M v A$179.3M y/y; +16.7%

RungePincockMinarco,RUL.AU Guides FY17 Rev A$74.7M v A$57.1M y/y; +15.6%

For the 24 hours to 23:00 GMT, the AUD rose 1.33% against the USD and closed at 0.7925.

LME Copper prices rose 0.8% or $51.0/MT to $6433.0/MT. Aluminium prices rose 0.9% or $19.0/MT to $2075.0/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7932, with the AUD trading 0.09% higher against the USD from yesterday's close, on the back of robust Australian jobs data.

Early morning data showed that Australia's seasonally adjusted unemployment rate fell to 5.6% in July, in line with market expectations, as the economy added jobs at a faster pace. Unemployment rate had registered a revised level of 5.7% in the preceding month.

The pair is expected to find support at 0.7856, and a fall through could take it to the next support level of 0.7779. The pair is expected to find its first resistance at 0.7979, and a rise through could take it to the next resistance level of 0.8025.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the EUR rose 0.32% against the USD and closed at 1.1778, after the second estimate of the Euro-zone's seasonally adjusted flash gross domestic product (GDP) advanced 0.6% on a quarterly basis in the second quarter of 2017, confirming the preliminary print, thus suggesting that the economy retained its momentum in the second quarter. In the previous quarter, the region's GDP had registered a revised rise of 0.5%.

The US Dollar lost ground against its major counterparts, after minutes of the Federal Reserve's (Fed) latest monetary policy meeting showed that policymakers were divided on raising interest rate again this year.

According to minutes, some officials remained increasingly wary over recent softness in inflation and called for halting interest rate hikes until it was clear that the recent softness in inflation is transitory, while some argued that such a delay could cause an eventual overshooting in inflation, provided a tightening labour market. Further, it also indicated that the central bank was poised to begin paring back its $4.5 trillion balance sheet as soon as September.

The US Dollar extended losses, aided by fresh political uncertainty in the US after the dissolution of a pair of business advisory groups by the US President, Donald Trump, after several CEOs stepped down from his advisory panels to protest his comments about violence in Charlottesville, Virginia.

On the data front, housing starts in the US unexpectedly dropped 4.8% on monthly basis, to an annual rate of 1155.0K in July, defying market expectations for an advance to a level of 1220.0K. Housing starts had recorded a revised level of 1213.0K in the prior month. Moreover, the nation's building permits eased more-than-anticipated by 4.1% on a monthly basis, to an annual rate of 1223.0K in July, compared to market consensus for it to drop to a level of 1250.0K. Building permits had registered a revised level of 1275.0K in the prior month.

On the other hand, the nation's mortgage applications climbed 0.1% in the week ended 11 August 2017, after recording a rise of 3.0% in the prior week.

In the Asian session, at GMT0300, the pair is trading at 1.1783, with the EUR trading marginally higher against the USD from yesterday's close.

The pair is expected to find support at 1.1713, and a fall through could take it to the next support level of 1.1644. The pair is expected to find its first resistance at 1.1821, and a rise through could take it to the next resistance level of 1.1860.

Investors will now pay attention to the European Central Bank's latest meeting minutes, along with the region's final consumer price index for July and trade balance for June, all slated to release in a few hours.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP rose 0.21% against the USD and closed at 1.2894, following upbeat jobs report from the UK.

Data showed that Britain's ILO unemployment rate unexpectedly dropped to 4.4% in the three months to June, highlighting that the nation's jobs growth remains on a solid footing despite an overall slowdown in economic growth. Meanwhile, market participants were expecting the ILO unemployment rate to remain steady at 4.5% registered in the March-May period. Also, the nation's average earnings including bonus climbed 2.1% on an annual basis in the April-June period, topping market consensus for a gain of 1.8% and following a revised rise of 1.9% in the three months to May.

In the Asian session, at GMT0300, the pair is trading at 1.2902, with the GBP trading 0.06% higher against the USD from yesterday's close.

The pair is expected to find support at 1.2860, and a fall through could take it to the next support level of 1.2817. The pair is expected to find its first resistance at 1.2927, and a rise through could take it to the next resistance level of 1.2951.

Moving ahead, market participants will focus on Britain's retail sales data for July, set to release in a few hours.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.46% against the JPY and closed at 110.09.

In the Asian session, at GMT0300, the pair is trading at 109.84, with the USD trading 0.23% lower against the JPY from yesterday's close, after overnight data showed that Japan's adjusted merchandise trade surplus widened more-than-anticipated to a level of ¥337.4 billion in July, as exports continued to increase, while market participants had anticipated for a surplus of ¥195.3 billion. In the preceding month, the nation had posted a revised surplus of ¥87.3 billion.

The pair is expected to find support at 109.36, and a fall through could take it to the next support level of 108.87. The pair is expected to find its first resistance at 110.64, and a rise through could take it to the next resistance level of 111.43.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.74% against the CHF and closed at 0.9652.

In the Asian session, at GMT0300, the pair is trading at 0.9646, with the USD trading 0.06% lower against the CHF from yesterday’s close.

The pair is expected to find support at 0.9603, and a fall through could take it to the next support level of 0.9561. The pair is expected to find its first resistance at 0.9727, and a rise through could take it to the next resistance level of 0.9809.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.99% against the CAD and closed at 1.2627.

In the Asian session, at GMT0300, the pair is trading at 1.2612, with the USD trading 0.12% lower against the CAD from yesterday’s close.

The pair is expected to find support at 1.2556, and a fall through could take it to the next support level of 1.2499. The pair is expected to find its first resistance at 1.2717, and a rise through could take it to the next resistance level of 1.2821.

Ahead in the day, traders will look forward to Canada’s manufacturing shipments data for June.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

Global Markets:

• Asian stock markets: Nikkei lost 0.10 %, Shanghai Composite rose 0.44 %, Hang Seng rose 0.2 %, ASX up 0.1 %
• Commodities: Gold at $1293.46 (+ 0.82%), Silver at $17.12 (+ 1.09 %), WTI Oil at $46.89 (+0.24 %), Brent Oil at $50.52 (+0.51 %)
• Rates: US 10-year yield at 2.3, UK 10-year yield at 1.10, German 10-year yield at 0.43

News & Data:

• AUD Employment Change 27.9 K vs 19.8 K expected
• AUD Unemployment Rate 5.6 % vs 5.6 % expected
• GBP Average Earnings Index 3 m/y 2.1 % vs 1.8 % expected
• GBP Claimant Count Change -4.2 K vs 3.2 K expected
• GBP Unemployment Rate 4.4 % vs 4.5 % expected
• USD Building Permits 1.22 M vs 1.25 M expected
• USD Crude Oil Inventories -8.9 M vs -3.0 M expected
• NZD PPI Input q/q 1.4 % vs 0.9 % expected
• Dollar on defensive after Fed minutes dampen rate hike prospects- RTRS
• U.S. talks tough on trade deficit as NAFTA discussions begin- RTRS

Markets Update:

Most of the Asian equity markets continued to rise on Thursday as tensions between the U.S. and North Korea continue to simmer down. It was a weaker dollar story in Asia today following on from the slides overnight.

AUD/USD added close to 0.2 percent to highs of 79.49 U.S. cents after the country added 27,900 jobs in July, beating expectations for an increase of 20,000. The currency had surged 1.3 percent after the Fed minutes sent the U.S. dollar lower.

USD/JPY lost over a 100 pips from the highs of 110.94. The Yen seemed to show some early signs of stability around the round number 110.00, but continued to drop again in Tokyo until 109.60, losing over 0.7 % in value since Wednesday.

EUR/USD rose 0.1 percent against the US Dollar to $1.17835, extending its 0.3 percent gain overnight, after the euro zone's second-quarter growth was revised to 2.2 percent from a year earlier, from 2.1 percent previously.

Upcoming Events:

• 08:20 GMT – (AUD) RBA Assist Gov Ellis Speaks
• 08:30 GMT – (GBP) Retail Sales m/m
• 09:00 GMT – (EUR) Final CPI y/y
• 11:30 GMT – (EUR) ECB Monetary Policy Meeting Accounts
• 12:30 GMT – (CAD) Manufacturing Sales m/m
• 12:30 GMT – (USD) Unemployment Claims
• 12:30 GMT – (USD) Philly Fed Manufacturing Index

Currency pair EUR/USD

The EUR/USD showed a strong bullish 4 hour candle at the support trend lines (green/blue), which indicates the potential completion of the wave 4 (green) correction. A break above the resistance trend line (red) increases the chance for a wave 5 (green) breakout.

The EUR/USD seems to have completed a wave 4 and 5 (brown) within wave C (purple). The bullish bounce also offers 5 waves which could complete wave 1 (purple).

Currency pair GBP/USD

The GBP/USD is testing the resistance trend line (red). A bullish break should start a wave 2 (red) correction whereas a bearish bounce could still indicate the continuation of wave 5 of wave 1 (red).

The alternative structure is that the GBP/USD is building a wave 4 (grey) within the downtrend. This scenario is invalidated if price manages to break above the resistance trend line (red) and 61.8% Fib of wave 4 vs 3.

Currency pair USD/JPY

The USD/JPY turned at the 38.2% Fibonacci resistance level which completed a potential wave A (orange). The bearish price action could be part of an ABC within wave B (brown). The invalidation level of the wave B is the 100% Fib level of wave B vs A at 108.73

The USD/JPY showed bearish momentum which could be a wave A (purple) within a larger ABC of wave B (orange). The invalidation level of the wave A is the 100% Fib level of wave B vs A at 110.95.