Overnight last night saw the release of the US Final Gross Domestic Product Figure (GDP) the forecast had been for a decline on the quarter figure from 2.1% to 1.9% the final figure came in at a slightly better than expected at 2.0%. However US Existing home sales, also released over night were significantly worse than forecasted at 4.76M down from the predicted 5.32M.
The Australian Dollar to US Dollar Exchange Rate hit a high of 72.49 US Cents with the low levels of liquidity experienced this time of year the market movement was subdued moving only half a percent. The market appears unsure since the final Federal Reserve Rate decision last week. We saw the Fed raise the official cash rate by 25 basis points. However the decision came with an accompanying statement providing inconsistent messaging as to their future stance for the year ahead.
Much of the ramifications of these comments and what they will mean for the US Dollar could well not be seen until January when the bigger market movers come back from their Christmas holidays and make determination on the future position for the US Dollar and its impact against a basket of currencies.
The New Zealand Dollar has continued to be the darling of the Christmas period consistently posting positive data releases during the month of December. Today continues the trend with the release this morning of their Trade Balance which has come in better than the economists forecast with a reduction to their deficit to -779M down from the previous at -905M and forecast of -812M. The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate is yet to show any significant movements on the release however we can expect this will continue to show the ‘Kiwi’ favour against the majors throughout this low liquidity period.
In other important currency news Azerbaijan, former soviet republic nation which spans between Asia and Europe, has had to devalue its currency the Azerbaijani Manat as a result of global oil pricing falls. Previously the Manat was fixed to the US dollar however the central bank of Azerbaijan decided to float the currency this week as oil export and their falling prices were creating increasing pressure on the health of the country’s economy. At the time the central bank announced its decision to up peg the Manat the currency fell 23% .
Out tonight we have the final key data releases for the week from the UK in the form of Current account and Final Gross Domestic Product (GDP) and from Canada their GDP figure along with Retail Sales. Canada has been suffering on the falling oil prices along with Azerbaijan and we could see indications of this in the data set for release tonight.