Australian Dollar
It was a slow day on the markets yesterday, with investors fixated upon the then upcoming interest rate decision from the Federal Reserve. There was some domestic data on the calendar, with the Westpac leading index edging down from an upwardly-revised 0.08% to 0.00% and skilled vacancies declining -0.4%. However, a soft US Dollar ahead of the Fed’s meeting provided room for the ‘Aussie’ to advance marginally. The Australian Dollar’s gains, averaging 0.3%, represented some of the strongest currency movements on an otherwise lacklustre day.
Today’s incredibly empty data calendar sees no releases from Australia.
Sterling
UK government borrowing figures for August revealed a significant deficit. On the one hand, this still represented a decrease on the same month last year, indicating borrowing was falling from its post-financial crisis peak. The fact that borrowing was as markets expected means that the Brexit did not cause a flurry of government spending as some had warned it would. On the other, however, it remained high and threw government targets and economists’ forecasts into doubt. Languorous market conditions made investors’ response to the data hard to discern.
Markets paid the August Confederation for British Industry (CBI) data more attention than usual thanks to the desperation for post-Brexit figures. The same could happen again today with September’s trends total orders and trends selling prices reports.
Euro
The Euro was more mobile than many of the majors yesterday, although the direction of that movement was notably to the downside. As well as expecting no changes to monetary policy from the Fed, the common currency was also undermined by a downwardly-revised set of economic forecasts from the Organisation for Economic Co-operation and Development (OECD). According to the OECD’s updated outlook the Eurozone will now grow 1.5% this year, down -0.1% on previous estimates, while 2017 growth will be -0.3% lower than earlier projections at 1.4%.
The European Central Bank’s (ECB) latest Economic Bulletin is due out later today.
US Dollar
The US Dollar was unsurprisingly in a weak state yesterday ahead of the Federal Open Market Committee’s (FOMC) interest rate decision. Although having no impact upon the day’s decision, MBA mortgage applications figures further lowered the outlook of the US economy after showing a -7.3% drop in requests for home loans.
Initial and continuing jobless claims figures are on the calendar today, although whether or not the market volatility sparked by the Federal Reserve’s announcement will have subsided remains to be seen.
Canadian Dollar
Canada’s outlook also took a hit thanks to the latest OECD report, which indicated that the Canadian economy would perform poorly in 2016. The OECD cut its forecasts for Canadian economic growth down to 1.2% – a reduction of half a percentage point on previous estimates, which were only made at the end of the second quarter.
There is no Canadian data on the calendar today.
New Zealand Dollar
The New Zealand Dollar made small advances yesterday, although there were reasons for the currency’s cautiousness. Following on shortly after the Federal Reserve’s policy announcement was the Reserve Bank of New Zealand’s latest rate decision. The combination was enough to keep anxious traders on hold, resulting in little activity for the ‘Kiwi’.
Although there is no further New Zealand data on the calendar, the New Zealand Dollar is still likely to see significant movement as markets continue to react to the outcome of the RBNZ policy meeting.
Data Released
September 22nd 18.00 EUR ECB Publishes Economic Bulletin
September 22nd 20.00 GBP CBI Trends Total Orders (SEP) -5
September 22nd 20.00 GBP CBI Trends Selling Prices (SEP) 10
September 22nd 22.30 USD Initial Jobless Claims (SEP 17) 261k
September 22nd 22.30 USD Continuing Claims (SEP 10) 2143k