Australian Dollar
Despite a lack of domestic data to provide headwinds and the absence of anything explosive on the US economic calendar, the Australian Dollar slumped on Friday. Traders were worried by comments from some of the world’s leading mining companies and financial institutions that the current strength in the iron ore markets would not last. Additionally, US President Donald Trump managed to reignite tensions with China by branding the country a ‘grand currency manipulator’, therefore reversing several days’ worth of cooling hostility between two of Australia’s key allies.
Australian fourth-quarter GDP is set for release on Wednesday.
Sterling
The Australian Dollar even declined against Pound Sterling on Friday, despite the British currency experiencing weakness virtually across the board. Mortgage approvals data showed the highest number of new home loans in a year, but this was not enough to support the Pound higher. With potentially several days of silence on the Article 50 debate and key UK PMIs scheduled for release at the end of next week, there was little in the immediate future to justify investing in Sterling.
Friday evening will see the release of the vital UK services PMI for February.
Euro
The Euro was mixed on Friday, with fresh warnings over the Greek economy largely souring appetite for the common currency. Greek central bank Governor Yannis Stournaras warned that the country’s fragile economic recovery could be damaged if the review into the current bailout could not be concluded soon. ‘If negotiations drag on with no agreement in sight, then Greece will enter in a new cycle of uncertainty, deteriorating relations with our partners and creditors, and a backslide of the economy into stagnation,’ he stated.
German consumer price data is set for release at the turn of midnight on Thursday.
US Dollar
The US Dollar was largely on strong form on Saturday morning, despite poor domestic data and the potential for worsening relations with China again. New home sales were expected to grow 6.3% after last month’s decline of -7%, but instead only managed to rise 3.7%. Continued expectations that President Donald Trump will increase stimulus measures helped the US Dollar rebound after a sell-off on Friday, but the ‘Greenback’ remained range-bound as investors were unwilling to price anything in further without more details.
Federal Reserve Chair Janet Yellen will make a speech early on Saturday morning, which could create volatility for the US Dollar.
Canadian Dollar
Stellar consumer price index figures for January pushed the Canadian Dollar into a bullish rise on Saturday morning. Month on month prices were expected to grow 0.3% after December’s -0.2% slowdown, but printed at 0.9%. Year-on-year price growth raced ahead to 2.1% from 1.5% – growth was only expected to clock in 0.1% higher than previous.
With the Bank of Canada (BOC) interest rate decision highly unlikely to see a change in policy, investors are likely to be more interested in Canadian GDP figures for the fourth quarter of 2016, released very early Friday morning.
New Zealand Dollar
There was no New Zealand data released on Friday and domestic news was thin on the ground. With the US Dollar strengthening despite poor ecostats, the New Zealand Dollar was pushed lower, slumping versus many of its major peers.
There is no high-impact New Zealand data due this week, but the ‘Kiwi’ is likely to see significant volatility in response to Wednesday’s Chinese PMIs.
Data Released
March 1st 11.30 AUD Gross Domestic Product (YoY) (4Q) 1.9%
March 1st 12.00 CNY Manufacturing PMI (FEB) 50.8
March 2nd 00.00 EUR German Consumer Price Index (YoY) (FEB P) 2.1%
March 3rd 00.30 CAD Quarterly Gross Domestic Product Annualized (4Q) 2.1%
March 3rd 20.30 GBP Markit/CIPS UK Services PMI (FEB) 54.2
March 4th 05.00 USD Yellen Speaks in Chicago