Australian Dollar
A combination of positive Chinese services data, stimulus hints from the Bank of Japan (BoJ) and falling US interest rate hike expectations served to bolster the Australian Dollar on Thursday.
With US ISM Non-Manufacturing falling flat and US interest rate hike expectations in serious decline, the Australian Dollar was able to benefit.
Although AUD remained slightly lower against NZD, the currency advanced by over 1% against both GBP and USD, with the ‘Aussie’ surging all the way to 0.72 against the US Dollar.
Are these gains set to last? Well that largely depends on upcoming releases. If the AiG Performance of Construction Index improves on the previous figure of 46.8 or domestic retail sales impress, the Australian Dollar’s bullish run could continue.
Sterling
A disastrous day for the Pound saw the AUD/GBP exchange rate jump by 1% during Thursday’s European session.
While the Pound had edged higher earlier in the week thanks to the UK Services PMI beating forecasts and ‘Brexit’ concerns easing slightly, the Bank of England (BoE) swiftly drove Sterling lower by delivering a unanimous vote to keep interest rates on hold.
Less-than-encouraging UK inflation and growth forecasts took a toll on Sterling demand and with no notable UK data scheduled for release before the weekend, GBP is unlikely to stage a recovery in the near future.
Euro
Although Retail PMI’s for the Eurozone and its largest economies printed in contraction territory, the broad based weakness of the US Dollar kept the Euro buoyant. While the Euro trounced the Pound and US Dollar., the AUD/EUR exchange rate did eke out a modest gain. German factory orders data could inspire a final flurry of Australian Dollar to Euro movement and if orders decline as expected we may see the common currency drop.
US Dollar
Worse-than-anticipated US Durable Goods Orders and Factory Orders data rounded off a run of sub-par releases from the world’s largest economy and left the US Dollar struggling.
With investors arguing that this stream of stats supports the case in favour of the Federal Reserve leaving borrowing costs on hold, higher risk currencies like the Australian Dollar benefited. The USD could drop further still over the weekend if the highly-influential US Non-Farm Payrolls report highlights weakness in the nation’s employment sector.
Canadian Dollar
Ahead of the publication of Canada’s employment figures, the ‘Loonie’ edged lower against its Australian rival as oil prices dipped back below $35 with investors displaying scepticism ahead of a gathering between the OPEC and other oil producers.
Canada’s employment stats are expected to show that the jobless rate held at 7.1% in January following an increase in positions of 6.5%. Unless the result is substantially different from the forecast, the Canadian Dollar is more likely to move as a result of oil price shifts.
New Zealand Dollar
This week’s upbeat employment figures for New Zealand continued to lend the New Zealand Dollar support as the weekend approached. The ‘Kiwi’ remained one of the few currencies to keep the rallying ‘Aussie’ at bay on Thursday and the AUD/NZD exchange rate was stuck trending around the day’s opening levels.
Data Released
Feb 5th 09:30 AUD AiG Performance of Construction Index (JAN)
Feb 5th 11:30 AUD Retail Sales
Feb 5th 11:30 AUD RBA Statement on Monetary Policy
Feb 5th 18:00 EUR German Factory Orders