Australian Dollar
With the US Dollar on the decline, the Australian Dollar was able to gain virtually across the board. The ‘Aussie’ benefited from a bout of risk appetite ahead of this week’s key US monetary policy decision. However, thin market liquidity due to the sparsity of data and the approach of Christmas slowed the Australian Dollar’s advance. The day’s only data had little impact after showing a small tick higher in October credit card purchases figure and no change to credit card balances.
NAB business confidence scores are released today.
Sterling
There was no UK data released yesterday, but the AUD/GBP exchange rate still posted losses, despite the widespread demand for the ‘Aussie’. The British Chambers of Commerce (BCC) had warned that the UK economy was set to weaken going forwards and cut its 2018 forecast to 1.4% from 1.8%. Although its prediction of 1.1% growth for 2017 represented a slight upward revision to earlier projections, it would still be the worst rate of expansion since before the financial crisis. The Pound didn’t seem bothered, however.
UK inflation data is set for release today; strong signs of price growth could trigger volatility.
Euro
Investor hopes of a rescue deal for struggling Italian bank Monte dei Paschi were supporting the Euro yesterday. Monte dei Paschi needs to raise €5 billion in capital from investors, but private lenders have so far been reticent to give their money to the failing institution. A treasury source told Reuters that the Italian government was still confident Monte dei Paschi would be able to raise the necessary capital from private investors, but also noted the state was ready to step in if necessary. This improved sentiment, lessening fears the bank would actually be allowed to collapse.
Eurozone ZEW sentiment survey results are set for release tonight.
US Dollar
With the eagerly-awaited Federal Reserve monetary policy meeting just around the corner, it’s hardly surprising that investors were not wanting to adjust their positions on the US Dollar yesterday. Most traders have already bought the ‘Greenback’ on the assumption it is set to strengthen following an interest rate hike, so there was a lack of demand for the US asset yesterday. This saw it weakening virtually across the board.
There is no US data on the calendar today that will affect the US Dollar considering how close the main event of the Federal Reserve policy meeting is now.
Canadian Dollar
Oil prices continued surging yesterday after the last piece of the OPEC oil cut puzzle fell into place. Cartel members had already agreed to reduction output, but this was based upon the assumption numerous non-OPEC countries could also be persuaded to reduce theirs. It was announced that eleven non-OPEC nations had agreed to cut their output by over -500,000 barrels per day. This sent crude oil climbing, but the Canadian Dollar weakened. Having hit a 17-month high on the news, the ‘Loonie’ was sold off as investors used the opportunity to take profit.
No Canadian data is scheduled for release today.
New Zealand Dollar
A weak US Dollar and strong commodity prices saw the New Zealand Dollar registering bullish gains yesterday. Bill English was sworn in as New Zealand Prime Minister; a move welcomed by investors. English may have a reputation as being boring, but as the former Finance Minister he is likely to protect the fiscal policies and attitudes that have kept New Zealand’s economy strong despite harsh global conditions.
The only New Zealand data set for release today is low impact manufacturing activity data. However, the subsequent Chinese industrial production and retail sales data could have a larger impact upon the ‘Kiwi’.
Data Released
December 13th 09.30 NZD Manufacturing Activity (3Q)
December 13th 11.30 AUD NAB Business Confidence (NOV)
December 13th 13.00 CNY Industrial Production (YoY) (NOV)
December 13th 20.30 GBP Consumer Price Index (YoY) (NOV) 1.1%
December 13th 21.00 EUR Eurozone ZEW Survey (Economic Sentiment) (DEC)