The Australian Dollar remained quite range-bound yesterday and overnight; allowing it to hold the major gain it made on the Sterling the previous night, as well as the minor gains it made against the EUR and USD.
Overnight the German Gross Domestic Product figures were released prior to the Euro-Zone’s GDP figure. Germany, the powerhouse of the European economy, posted downgraded GDP figures for the second quarter of the year, falling below economic expectations. The amalgamation of the European nations goods and services output, in the form of the Euro-Zone GDP was released and it showed zero growth for the quarter, making the annualised GDP figure 0.7% as expected.
The Pound fell heavily Wednesday night across the currency board when the Bank of England Inflation Report proved to be much more dovish than expected. Tonight the UK will announce their GDP figure which is expected to remain unchanged at 3.1%. Any deviation from this figure is likely to the catalyst for late week Pound Sterling strength or weakness; with a higher figure likely to provide support to the GBP and lower figure likely to lower its’ value further.
Nearly all of the other economic data to be released today and this evening is North American focused with the Canadian economy reporting on Existing Homes Sales and Manufacturing Shipments. The US will release their Manufacturing Production and Industrial Production figures, of which both are expected to be a slight improvement on the month’s result. The University of Michigan’s monthly report on US consumer confidence provides a key insight into the economic outlook of the US economy and is a highly valuable indicator for economists. The forecast for this announcement is a slight rise, which should add value to the USD if the outcome eventuates.
Overall this week, the AUD made some surprising gains against most of the major currencies, even with the absence of strong domestic data. It will be interesting to see if the Reserve Bank of Australia’s Monetary Policy Meeting Minutes next Tuesday will make any reference to the Australian Dollar’s value and the affect it has on the currency.