Australian Dollar
Although Chinese data unsettled the Australian Dollar on Friday, the ‘Aussie’ was able to hold its gains against most of the majors. Chinese industrial production and retail sales weakened slightly on the month. Aggregate financing in July was a quarter of what it was in June, while new Yuan loans came in at a third of the previous month’s total. The ‘Aussie’ remained on an uptrend, however, helped higher by the weak US Dollar.
Australian employment and unemployment figures for July are set for release on Thursday.
Sterling
The Australian Dollar once again strengthened against Pound Sterling on Friday, as the Pound again became the worst performing currency of 2016, beating the Argentine Peso, the Mexican Peso and the Chinese Renminbi to the moniker thanks to year-to-date losses of around -12%. Construction output figures for June came in marginally below forecasts, showing an accelerated pace of decline of -2.2% compared to the previous -1.6%. Markets initially reacted positively, relieved that the drop hadn’t been lowered considering the June construction PMI had unexpectedly crashed into contraction territory. However, the bleak outlook for the UK economy quickly returned to weigh on the Pound.
UK consumer prices for July are due out on Tuesday.
Euro
Positivity won out for the Euro on Friday, despite mixed results from the day’s data. Italian GDP figures caused consternation amongst observers after the country saw no growth during the second quarter, according to preliminary estimates. 0.2% had been predicted, a minor downtick on the first quarter’s 0.3% expansion. German GDP outperformed, however, jumping from 1.5% to 3.1% on the year.
Eurozone GDP held steady at 1.6%, while industrial production ticked slightly higher. Poor Spanish inflation figures added to the Euro headwinds created on Thursday by French, Italian and Irish consumer price data, but the weak US Dollar helped the common currency advance regardless.
Eurozone and German ZEW survey scores are released on Tuesday. Sentiment data so far has shown that the Eurozone has largely shrugged off any concerns regarding the UK’s decision to leave the European Union, so investors will be hoping for more of the same.
US Dollar
Key US data once-again disappointed on Friday, leaving the US Dollar weak thanks to a dimmer outlook for the US economy. Fed Funds futures still barely see a hike taking place in May 2017; in the last few weeks the headline US data has pushed bets of monetary tightening back from December of this year deep into 2017. Hopes of tighter monetary policy had been raised slightly when the Fed’s John Williams claimed that rates should still be hiked in 2016, possibly in December.
Advance retail sales figures quickly undermined any positivity derived from his words after showing no growth on the month instead of the slowdown from 0.8% to 0.4% expected.
US consumer price data is due out on Tuesday. The US Dollar could therefore be in for significant deprecation if the inflation data repeats the recent trend of significantly disappointing forecasts.
Canadian Dollar
Crude oil was making confident steps back towards the more market-friendly level of US$45 per barrel for WTI. Brent climbed firmly above US$46. Being priced in US Dollar means that commodities strengthen as the ‘Greenback’ weakens, helping the Canadian Dollar as well. There was no notable Canadian economic data on the calendar, although given the recent poor performance from high-impact Canadian releases, this might have been a point in the ‘Loonie’s favour.
Canadian Dollar traders will once again have to wait until the end of the week for the most important data, which will be the consumer price figures for July.
New Zealand Dollar
There was little in the way of domestic developments to boost the New Zealand Dollar on Friday, but the weakening US Dollar allowed the ‘Kiwi’ to advance on strong risk-appetite.
The latest GlobalDairyTrade auction takes place on Tuesday and is likely to offer significant New Zealand Dollar movement unless prices stagnate, although that could still be taken positively.
Data Released
August 16th NZD Dairy Auction Avg. Winning Price MT (AUG 16)
August 16th 18.30 GBP Consumer Price Index (YoY) (JUL)
August 16th 19.00 EUR Eurozone ZEW Survey (Economic Sentiment) (AUG)
August 16th 22.30 USD Consumer Price Index (YoY) (JUL) 0.9%
August 18th 11.30 AUD Unemployment Rate (JUL)
August 19th 22.30 CAD Consumer Price Index (YoY) (JUL)