Headlines
- ‘Aussie’ Softens – AUD/USD slides towards mid 0.77
- AUD/GBP Slumps – Pound ignores retail sales and borrowing figures
- Euro Broadly Stronger – Lack of policy loosening from ECB turns Euro bullish
- New Zealand Dollar Down – ‘Kiwi’ weakens despite positive domestic data
Australian Dollar
The Australian Dollar was mostly weak yesterday, although its initial position of strength – an 18-month high verses the Pound and an 11-month high against the Euro – made it a target for trader profit taking. The latest NAB Business Confidence index showed that sentiment had held steady in the first quarter of 2016, with the results pointing to an optimistic outlook over coming weeks.
There is no Australian data due today and with a lack of impactful US releases to move the US Dollar, the Australian Dollar could find itself being driven by general market sentiment.
Sterling
The Australian Dollar was unable to make gains against Pound Sterling yesterday, despite poor UK data. Retail sales saw a significantly accelerated decline in March, dropping -1.6% after February’s -0.3% fall, while annual growth slowed from 3.8% to 1.8%. Public sector borrowing actually came in below forecasts, however the final figure for the 2015-16 fiscal period showed that George Osborne had borrowed £1.8 billion more-than-predicted. However, with AUD/GBP at an 18-month high, the Pound was protected from downside pressures and advanced as its low value made it an appealing prospect for investors.
A lack of data could see Pound Sterling moved by trader sentiment today, with Barack Obama’s comments likely to create significant movement for Sterling.
Euro
A lack of any further policy loosening from the European Central Bank (ECB) boosted the Euro yesterday. Mario Draghi hinted that interest rates could be cut again and that inflation may return to negative territory. However, he gave a robust defence of the ECB’s monetary policy when asked about the recent criticism of the central bank from German politicians. He also stressed that the Governing Council had not discussed the controversial idea of ‘helicopter money’, showing that the Governing Council was not as desperate as some had feared.
There is a raft of Eurozone PMIs due out today. The services, manufacturing and composite readings for Germany and the Eurozone are mostly expected to show a mild uptick.
US Dollar
Positive data allowed the US Dollar to make some gains yesterday. Sales of existing homes saw a strong rise in March, accelerating 5.1% on the month to 5.33 million. Meanwhile initial jobless claims and continuing claims both printed slightly lower than the forecasts, which had predicted a small increase. However, the Philadelphia Fed index for April dropped considerably, tumbling from 12.4 to -1.6, despite a forecast printing of 9. This suggests that manufacturing activity took a significant hit this month.
The only US data release due today is the Markit US Manufacturing PMI, expected to show a minor uptick in activity from 51.5 to 52.0.
Canadian Dollar
With today’s inflation data predicted to show a fall in consumer prices, traders were profit-taking on the Canadian Dollar yesterday. The ‘Loonie’ has made respectable gains against several of the majors over the past few days, but is now falling again as speculators realise their gains. This is despite the fact that Brent Crude oil has strengthen once more, rising back above the key psychological mark of US$45 per barrel.
As well as its latest CPI report, Canada is due to publish retail sales data today.
New Zealand Dollar
Yesterday’s data was mostly positive, yet the New Zealand Dollar slumped against the majors. The number of job advertisements in March increased by 2.9% and the ANZ Consumer Confidence Index saw a 1.7% rise in sentiment to 120.0. However, card spending saw a -1.1% drop on the month in March, while on the year growth slowed from 7.3% to 4.8%.
There is no domestic data due today that could move the New Zealand Dollar, so market sentiment and commodity prices could play a major role in deciding ‘Kiwi’ movement.
April 22nd 17.30 EUR Markit/BME Germany Composite PMI (APR P) 54.2
April 22nd 18.00 EUR Markit Eurozone Composite PMI (APR P) 53.3
April 22nd 22.30 CAD Consumer Price Index (YoY) (MAR) 1.2%
April 22nd 22.30 CAD Bank Canada Consumer Price Index Core (YoY) (MAR) 1.7%
April 22nd 23.45 USD Markit US Manufacturing PMI (APR P) 52.0