Australian Dollar
Weak domestic data, coupled with mixed trade figures from China, kept the Australian Dollar soft yesterday. A significant drop in consumer confidence undermined ‘Aussie’ sentiment, with the Westpac Consumer Confidence Index falling -4% to 95.1.
The latest forecasts from the International Monetary Fund (IMF) predicting Australian GDP would remain below the world average of 2.5% for two years also weighed on sentiment.
Coupled with hawkish comments from a US Fed official, market sentiment was against the Australian Dollar yesterday, with the ‘Aussie’ making small losses against the Canadian Dollar and Pound Sterling while declining further against the US Dollar and New Zealand Dollar. The only notable gain was against the Euro.
Today’s Unemployment Rate and Employment Change figures for March will cause significant ‘Aussie’ movement. It is expected that nearly 19k jobs will have been created last month, although unemployment is expected to rise 0.1% to 5.9%.
Sterling
There was little movement for the Australian Dollar against the Pound yesterday, with weak ‘Aussie’ sentiment matched by a thin supply of UK data.
Investor sentiment was warmed by the latest Prime Minister’s Questions, in which a technical discussion regarding tax had commentators noting that the scandals erupting from the ‘Panama Papers’ leak seemed to have abated.
The Bank of England makes its next rate decision tonight. Investors may be anticipating no change in interest rates but they’re awaiting the meeting minutes to see if the latest inflation data has improved the outlook of policymakers.
Euro
The latest Eurozone industrial production figures cooled Euro appetite yesterday after showing a significant on the month drop in activity. Monthly production fell at a seasonally adjusted -0.8% in February, while on the year production slowed from 2.9% to 0.8%, in both cases significantly undercutting forecasts.
With the International Monetary Fund (IMF) having suggested that monetary stimulus in the Eurozone would be needed for some time to come, the Euro was once again left in a weakened position. This allowed the Australian Dollar to make strong gains, despite a lack of domestic strength.
Eurozone inflation data for March is expected to print positively today, which could help the Euro climb out of its current trough.
US Dollar
Hawkish comments from Richmond Fed President Jeffrey Lacker overshadowed a worse-than-expected performance from retail sales yesterday to keep the US Dollar bullish. Advance Retail Sales declined -0.3% in March after a previous -0.1% drop, despite a rise of 0.1% being forecast.
However, trader attention was focussed on Lacker’s remarks after he backed the idea of raising interest rates four times in 2016. Lacker doesn’t vote on monetary policy this year, but his comments fuelled a US Dollar rise nonetheless.
Today’s Consumer Price Index is expected to show a small uptick in inflation, which could boost the US Dollar to the detriment of the Australian Dollar.
Canadian Dollar
The Bank of Canada (BOC) made its latest interest decision yesterday, leaving rates on hold as predicted. The accompanying policy statement strengthened the ‘Loonie’ after revealing that the BOC believe the government’s latest infrastructure investments will boost economic growth by 0.5% during 2016 and 0.6% in 2017. The BOC also revised its growth forecast for 2016 up 0.3% from its January estimate, taking its forecast for Canadian GDP to 1.7% this year.
Today’s only Canadian data comes in the form of the New Housing Price Index for February.
New Zealand Dollar
Recent positive data releases helped to boost the New Zealand Dollar, despite the downwards pressure coming from a strengthening US Dollar. Tuesday’s House Sales figures showed an 8.2% uptick in year-on-year prices during March, while yesterday’s 0.5% rise in food prices further pointed to stronger inflationary pressures.
Investors interpreted the data as a sign that the New Zealand economy is improving, lessening the chances that the Reserve Bank of New Zealand (RBNZ) will cut interest rates in the near future.
Today’s most noteworthy data for New Zealand will be the Business NZ Performance of Manufacturing Index for March.
Data Released
April 14th 08.30 NZD Business NZ Performance of Manufacturing Index (MAR)
April 14th 11.30 AUD Unemployment Rate (MAR) 5.9%
April 14th 11.30 AUD Employment Change (MAR) 18.5k
April 14th 19.00 EUR Eurozone Consumer Price Index (YoY) (MAR F) -0.1%
April 14th 19.00 EUR Eurozone Consumer Price Index – Core (YoY) (MAR F) 1%
April 14th 21.00 GBP Bank of England Rate Decision (APR 14) 0.50%
April 14th 21.00 GBP MPC Meeting Minutes
April 14th 22.30 CAD New Housing Price Index (YoY) (FEB) 1.8%
April 14th 22.30 USD Consumer Price Index (YoY) (MAR) 1.1%
April 14th 22.30 USD Consumer Price Index Ex Food & Energy (YoY) (MAR) 2.2%