EURO LITTLE CHANGED AFTER DATA; CANADIAN DOLLAR CONSOLIDATES GAINS

The euro was in consolidation mode Thursday, reversing sharply from intraday highs, as investors dissected the latest series of Eurozone economic data. Meanwhile, the Canadian dollar steadied after a 200-pip gain against the dollar on Wednesday.

Germany’s consumer price index (CPI) rose 1.6% in the 12 months through June, the Federal Statistical Agency confirmed on Thursday. The Harmonised Index of Consumer Prices (HICP) climbed 1.5% over the same period.

Meanwhile, Swiss inflation declined unexpectedly in June, falling 0.1% annually.

The US Labor Department released a fresh batch of producer inflation data at the start of New York trade. The producer price index (PPI) rose 2% year-over-year in June, slightly higher than forecasts calling for 1.9%. Excluding food and energy, the PPI was up 1.9%, down slightly from 2% the previous month.

Earlier in the day, the Chinese government reported a bigger than expected trade surplus for the month of June. Beijing’s dollar-denominated trade surplus rose to $42.77 billion from $40.79 billion the month before. Analysts in a median estimate called for a surplus of $42.44 billion. Exports rose 11.3% annually, following an increase of 8.7% the previous month. Imports spiked 17.3% following gains of 15.5% the prior month.

The US dollar index (DXY), a broad performance measure of the greenback against a basket of six currencies, slipped 0.1% to 95.68. The greenback declined sharply earlier this week, as the euro and pound rose.

Oil markets were calm in early morning trade, as traders awaited fresh trading catalysts in the form of rig count data.

EUR/USD

The EUR/USD exchange rate fluctuated within a volatile range Thursday, reaching a session low of 1.1370 and a high of 1.1460. The pair was last seen hovering around 1.1413, little changed from the previous close. The outlook remains supportive of further gains, although it’s clear that the common currency ran into resistance at the upper end of the 1.1400 range.

USD/CAD

The Canadian dollar has been strongly bullish for weeks now, as traders re-evaluated their positions amid a string of upbeat economic data from the Great White North. The bulls were vindicated on Wednesday after the Bank of Canada (BOC) voted to raise interest rates for the first time in seven years. The USD/CAD consolidated losses on Thursday and was last seen trading in the mid-1.2700 region.

WTI OIL

Oil prices traded within a narrow range Thursday morning, as the market consolidated after a week’s worth of solid gains. US West Texas Intermediate (WTI) futures were down 0.1% at $43.38 a barrel at the start of New York trading. Despite the slight pullback, oil prices have gained momentum and could be poised for stronger gains in the short run.