Dollar remains the strongest major currency this week as markets await Fed chair Janet Yellen's speech. After FOMC kept interest rates unchanged last week, there was a chorus of Fed hawks affirming that rate hike would still happen this year. Yellen's view on this will be closely watched. Meanwhile, yesterday, Atlanta Fed president Dennis Lockhart tried to down play the impact of the slowdown in China. He said that "China is slowing to still a very respectable pace of growth" and "there is a decent chance that the world is overreacting".
Released From New Zealand, trade deficit widened to NZD -1035m in August, higher than expectation of NZD -875m. That's mainly due to aircraft import that totalled NZD 230m and lifted imports 19% to NZD 4.77b. Export did record 4.4% growth to NZD 3.73b, the highest value for August. New Zealand dollar recovered mildly after the release but remains soft. Released from Japan PMI manufacturing dropped to 50.9 in September.
NZD/JPY is staying in sideway trading since last August. Recovery has been week and the price actions since then are corrective in nature. More consolidation would be seen but we'd expect strong resistance below 80.42 resistance to limit upside. The down trend fro 94.01 is expect to continue to 61.8% retracement of 54.78 to 94.01 at 69.76.
Looking ahead, German Ifo business climate and Gfk consumer sentiment will be the main focus in European session. UK will release BBA mortgage approvals. Euro has been under some pressure on talk that ECB would expand the quantitative program. Euro will be vulnerable on weak German data. From US, jobless claims, durable goods and new home sales will be released.