Australian Dollar
Anticipation of and the subsequent reaction to key US data yesterday saw the Australian Dollar putting on a sporadic performance. The ‘Aussie’ began the session with strong advances against most of the major currencies as the US Dollar weakened ahead of key labour market data. Some positive domestic data also boosted the Australian Dollar, with the AiG Performance of Manufacturing Index showing a significant rise in activity during the course of March, while the decline in the RBA Commodity Price Index slowed considerably from -22.2% to -15.4%.
Gains were reversed in the wake of the US Non-Farm Payrolls report, however, as the US Dollar began to climb out of the trough entered following a speech from Federal Reserve Chair Janet Yellen earlier in the week.
Monday will be a busy day for Australian data, with the docket including Retail Sales and Building Approvals.
Sterling
The UK government has been criticised for helping to contribute to the current steel crisis after it emerged that Business Minister Sajid Javid was instrumental in preventing higher EU tariffs on Chinese steel.
The EU has long wanted to raise tariffs on steel imported from China in order to make that produced within the single market more competitive. However, a coalition of countries led by the UK have consistently blocked attempts to do so, believing that being able to source cheap materials abroad is beneficial to other areas of the economy.
The future of Tata Steel’s UK operations is uncertain, but a recent poll has shown that two-thirds of UK residents support the idea of nationalising the industry.
The Markit/CIPS Construction PMI is due out towards the end of the session on Monday, which could move GBP, although the steel industry crisis is likely to dominate Pound Sterling exchange rates.
Euro
Positive Markit PMIs boosted the Euro’s appeal recently, after a week of lacklustre sentiment in which traders speculated that even more monetary loosening from the European Central Bank (ECB) could be on the cards.
Measures of manufacturing activity for Italy, Germany and the Eurozone all printed higher than expected. The only downside was that the French manufacturing sector remained in contraction, although this had been forecast so the news didn’t shock investors.
Economists will be keeping an eye on Monday’s Eurozone Sentix Investor Confidence index.
US Dollar
Traders looked to the approaching US Non-Farm Payrolls for guidance towards the close of last week, although many economists had speculated that the influential data would have less of an impact than usual. With Fed Chair Janet Yellen focussing on the global crisis some investors doubted the ability of domestic data, such as the NFP, to particularly sway Fed opinion on interest rates.
However, any expectations that the data may go largely unnoticed were quickly confounded when the better-than-anticipated jobs figure was released, along with above-forecast growth for wages. A strong result from these two key indicators of economic progress caused traders to forget their previous apathy and flock back to the safe-haven USD.
There is no data due for the US on Monday, although the rest of the week promises a plethora of potentially market-moving ecostats.
Canadian Dollar
News late on Thursday that the Canadian economy leapt into action at the start of 2016 failed to bolster the Canadian Dollar for very long and the ‘Loonie’ was trending negatively before the weekend. The GDP figures revealed growth of 0.6% on the month in January, while year-on-year (YoY) expansion increased nearly 1% to hit 1.5%.
However, oil once again proved to be the key influencer of ‘Loonie’ fortunes, with news from the Organization of Petroleum Exporting Countries (OPEC) triggering a sharp decline in Brent Crude oil. Figures showed that oil production rose in March, with Iranian output hitting a four-year high. The group’s previous output target, scrapped in December, of 30 million barrels per day was exceeded by over 10% last month, which saw Brent Crude prices tumble more than -3.5%.
Oil market sentiment will likely be the key driver of ‘Loonie’ sentiment on Monday as there is no Canadian data set for publication.
New Zealand Dollar
The New Zealand Dollar battled hard on Friday, pulled lower by the strong US data and propelled by upbeat releases from China. The better-than expected manufacturing PMIs from China helped the ‘Kiwi’ to make some advances on the prospect of heightened demand from a major trading partner. However, a bullish US Dollar following the strong US Non-Farm Payroll printing pushed the New Zealand Dollar into negative territory against most of its commonly traded peers.
There is no data due for New Zealand until Tuesday.
Data Released
April 4th 12.00 AUD TD Securities Inflation (YoY) (MAR)
April 4th 12.30 AUD Retail Sales s.a. (MoM) (FEB)
April 4th 12.30 AUD Building Approvals (YoY) (FEB)
April 4th 19.00 EUR Eurozone Sentix Investor Confidence (APR)
April 4th 19.30 GBP Markit/CIPS UK Construction PMI (MAR)