Australian Dollar
The Australian Dollar was largely bullish on Friday as the US Dollar continued weakening following the Thanksgiving holiday market closure. Also supporting the Australian Dollar was a forecast from analysts at the Bank of America Merrill Lynch, stating that Australia was likely to break the Netherland’s record for longest period of uninterrupted economic growth. According to BAML analysts, ‘in 2017, Australia will surpass the Netherlands’ 25-year modern day record of consecutive growth in a developed economy, not bad for a small open economy and a high beta commodity exporter.’
There is no tier-one Australian data set for release over the coming days, but Thursday’s Chinese manufacturing PMI is likely to have a notable impact upon the ‘Aussie’.
Sterling
AUD/GBP was able to make bullish advances on Friday, despite the release of solid Q3 GDP figures from the UK. These were the second round of estimates for the three-month period ending in September and were unchanged on the initial projections. Quarter-on-quarter growth clocked in at 0.5%, while year-on-year growth printed at 2.3%. As these figures were in line with forecasts and represented no change on earlier estimates, there was little to excite or deter investors, so the Pound slumped.
Government ministers are meeting with the devolved country leaders over the weekend to discuss the Brexit negotiations. This could prove a particularly strong source of Pound Sterling volatility as the week begins, especially if the Scottish, Irish or Welsh First Ministers are still unhappy with the government’s Brexit plans, or lack thereof.
Euro
There was no Eurozone data released on Friday, but the Euro was largely on the advance. A weak US Dollar gave the common currency room to climb, boosted by cross trades as traders sought profitable Euro pairings.
Wednesday promises volatile Euro trade, thanks to the release of high-impact German CPI and unemployment data and Eurozone CPI, all for November.
US Dollar
The US Dollar was already on a slump thanks to closed markets during the Thanksgiving Holiday on Thursday. Friday saw the ‘Greenback’ slide continue amid fears of overvaluation and some disappointing domestic data released early on Saturday. The advance goods trade balance for October was expected to weaken from -US$56.5 billion to -US$58 billion, but instead slumped to -US$62 billion. Wholesale inventories slipped -0.4% – a worrying indication as far as inflationary pressures are concerned as it suggests suppliers are seeing falling levels of consumer demand.
The vital change in non-farm payrolls report for November is set for release very early on Saturday morning. A slight increase in the number of roles hired compared to the previous month is expected from 161,000 to 170,000. This is a solid, if not impressive, number and will keep bets of monetary tightening in December high.
Canadian Dollar
Markets continued to speculate on Friday over the outcome of next week’s Organisation of the Petroleum Exporting Countries (OPEC) meeting to discuss oil production cuts. While there have been strong indications that all members of the cartel, which contributes a third of the world’s oil supply, will co-operate with a cut, there is confusion over whether outside producers will also be on board. Saudi Arabia had initially been rumoured to be pushing hard for non-OPEC members to participate, but news that the Saudi oil minister would not be attending talks with nations outside of the cartel weakened sentiment, dragging the Canadian Dollar lower.
Canadian GDP figures for September are due on Thursday.
New Zealand Dollar
The New Zealand Dollar was able to make bullish gains on Friday thanks to the weakness in the US Dollar. The ‘Kiwi’ advanced across the board, supported by the latest positive trade balance data. As well as the previous month’s deficits being cut lower, October’s month-on-month trade shortfall shrank from -NZ$1,394 million to -NZ$846 million and the year-on-year deficit edged down from -NZ$3.4 billion to -NZ$3.3 billion. Exports were up nearly half a billion NZD, while imports edged lower.
Like the Australian Dollar, the New Zealand Dollar can expect to see strong movement in response to the Chinese manufacturing PMI on Thursday.
Data Released
November 27th GBP Joint Ministerial Meeting (Brexit Negotiations)
November 30th 21.00 EUR Eurozone Consumer Price Index Estimate (YoY) (NOV) 0.6%
December 1st 00.30 CAD Gross Domestic Product (YoY) (SEP)
December 1st 12.00 CNY Manufacturing PMI (NOV)
December 3rd 00.30 USD Change in Non-farm Payrolls (NOV) 170,000