The Australian GDP figures that were released yesterday were higher than expected. The economic forecast was that the annualised monetary value of all the goods and services produced within Australia would increase from 2.7% to 3.2%. It actually increased to 3.5% and caused the AUD to rally off the back of this economic growth indicator. At 11:30am AEST today we have the AUD Trade Balance figure for the month of April being announced which is expected to decrease from $731M to $510M.
Yesterday the Services PMI out of the Euro Zone indicated an economic outlook that was not as strong as the forecast and the EUR lost some ground. The Euro-Zone has been experiencing relatively small growth based on recent Gross Domestic Product figures and last night’s announcement was no exception, with the result being 0.9% year-on-year as anticipated. The European Central Bank Rate Decision will follow the BoE’s tonight and is expected to reduce the current cash rate from 0.25% to 0.1%. Such an announcement is likely to accelerate the reduction of the Euro value.
Tonight the Bank of England Rate Decision will also be announced tonight, however it has been tipped to remain at 0.5%. Any mention of a rate increase in the near future by the BoE is likely to be the catalyst for Pound strength towards the back end of the week.
The North American economies will be watched closely tomorrow evening for the release of both the US and Canadian employment figures. The Greenback may see a sell-off if the US Unemployment Rate increases as anticipated from 6.3% to 6.4% while the Loonie is likely to remain stable if Canada’s official Unemployment Rate remains at 6.9% as the economic forecast suggests. Both announcements could be the catalyst in adding some late-week volatility to the currency market if the results are unexpected.
Overall, the past few days have been good to the Aussie, with gains achieved against most of the majors, however, it will be interesting to see whether or not it will be able to hold its ground as the weekend approaches.