Australian Dollar
On the face of it, Australian unemployment data released yesterday seemed largely positive. Markets weren’t convinced though and the Australian Dollar slumped. While unemployment unexpectedly fell ten basis points to 5.7%, this was only because of a decrease in the number of people looking for work. Meanwhile, the number of people in employment may have increased for the fourth month in a row – rising by 13,500 – but there was a huge -44,800 drop in the number of people in full-time roles.
Sterling
There was no UK data released yesterday, but this didn’t give the AUD/GBP any reprieve. The Australian Dollar slumped as investors returned to the Pound after two days of selling on poor inflation and wage growth data.
UK retail sales figures today could heighten or dispel fears of slowing consumer activity.
Euro
The Euro was able to overcome notable headwinds yesterday thanks to its inverse correlation with the US Dollar, which was slumping. The latest European Central Bank (ECB) meeting minutes showed that the Governing Council was still strongly resistant to calls it should moderate its loose monetary policy and enormous asset purchasing programme. According to the minutes, policymakers would look through the recent strong data to focus on whether core inflation was performing well enough to warrant reigning in accommodative policy.
Eurozone current account and construction output figures are the only data of note today.
US Dollar
The US Dollar slumped yesterday, despite strengthening rate hike bets. Economic data was mixed, but the overall trend wasn’t weak enough to prompt such a bearish response. Housing starts fell -2.6% on the month, but building permits rose 4.6% instead of 0.2% and the Philadelphia Fed business outlook index leapt from 23.6 to 43.3 instead of weakening to 18. Initial jobless claims rose by less-than-expected, but continuing claims only eased back -3,000 instead of by -29,000.
It is a surprisingly empty end to the week for the US in terms of economic data.
Canadian Dollar
The Canadian Dollar was on mixed form yesterday, mirroring the oil markets; while WTI crude was edging higher, Brent crude was weakening. The oil markets had risen sharply after sources suggested OPEC may cut production more deeply if the global oversupply persists, but gains quickly receded again. Investors may have been recalling the protracted back-and-forth that took place over many months before all members finally agreed to the extent and timescale of the cuts, leaving little to get excited about in the short-term.
New Zealand Dollar
The New Zealand Dollar was largely on the decline yesterday. February’s consumer confidence data was disappointing, showing that sentiment had edged down by -1% to 127.4. On a seasonally-adjusted level, confidence actually improved; February tends to see a dip in optimism as the holiday spirit fades and the reality of work sinks in. However, investors were in no mood to buy the risky ‘Kiwi’.
The Business NZ performance of manufacturing index is set for release soon.
Data Released
February 17th 08.30 NZD Business NZ Performance of Manufacturing Index (JAN)
February 17th 20.00 EUR Eurozone Current Account s.a. (euros) (DEC)
February 17th 20.30 GBP Retail Sales (YoY) (JAN)