Australian Dollar
The US Dollar may have been strengthening yesterday, but positive Australian data allowed the ‘Aussie’ to stay buoyant. Employment grew by more than double the forecast amount, climbing over 39,000. Even more encouragingly, the entire influx of new workers went into full time work. The unemployment rate edged up to 5.7%, but this was due to an above-forecast rise in the participation rate.
It’s a quiet data day today, with nothing on the calendar for Australia.
Sterling
AUD/GBP edged into positive territory yesterday, with the Pound weakened by the latest Bank of England (BoE) policy meeting. No changes were made to interest rates or quantitative easing, as had been expected. It was the Bank’s inflation outlook which disappointed investors. The latest price growth has been above forecast, leading many traders to hope the Bank of England would see this as justification for monetary tightening. However, the Bank of England noted that Sterling has also appreciated considerably following the post-referendum crash, meaning that inflation is likely to overshoot its target by less than initially forecast. This has put a dampener on rate hike hopes.
The only UK data on the calendar today is the CBI trends data, including total orders and selling prices.
Euro
USD strength, mixed PMIs and further complications to the Greek bailout kept the Euro on the decline yesterday. While France posted a strong trio of services, manufacturing and composite PMIs, German services and composite scores declined more-than-forecast. The Eurozone services index weakened, although manufacturing remained strong. The figures still suggested that Eurozone GDP had accelerated in the final quarter of the year, although investors were worried that a slowdown in Germany could drag on the currency bloc going forwards. Meanwhile, the Greek Parliament looked set to approve additional Christmas pay-outs for pensioners, harming the chances of the country receiving debt relief from Eurogroup.
Eurozone finalised consumer price index data for November is expected to show no change on previous estimates.
US Dollar
The Federal Reserve’s latest policy announcements managed to boost the US Dollar yesterday, despite the markets already certain of the 0.25% interest rate hike that was declared. However, investor hopes were raised by a surprise upwards revision to the Fed ‘dot plot’, showing that the majority of policymakers now believe interest rates will be hiked three times in 2017 rather than just twice.
The most high-impact data on the calendar today for the US is the net long-term TIC flows data for October.
Canadian Dollar
With the US Dollar rising, crude oil prices were on the decline, pressuring the Canadian Dollar lower as WTI Crude threatened to fall back below US$50 per barrel. Manufacturing data disappointed as well, with month-on-month manufacturing shipments growth in October declining -0.8%. Experts had expected growth would accelerate from 0.3% to 0.4%.
There is no Canadian data set for release today.
New Zealand Dollar
Disappointing data and the latest US interest rate hike pushed the New Zealand Dollar lower yesterday. The Business NZ Performance of Manufacturing Index for November edged lower, falling from 55.2 to 54.4 and the Q3 measure for value of all buildings grew by 1.4% – a much larger slowdown on the Q2 growth rate of 5.5% than was expected.
ANZ consumer confidence figures for December are set for release today.
Data Released
December 16th 08.00 USD Net Long-term TIC Flows (OCT)
December 16th 11.00 NZD ANZ Consumer Confidence (MoM) (DEC)
December 16th 21.00 EUR Eurozone Consumer Price Index (YoY) (NOV F) 0.6%
December 16th 22.00 GBP CBI Trends Total Orders (DEC) -2