Australian Dollar
Disappointing domestic reports took the edge off Monday’s bullish run for the Australian Dollar yesterday. The ‘Aussie’ did manage to edge higher against some of its weaker peers like the Euro and Canadian Dollar, however. The weekly ANZ Roy Morgan consumer confidence index edged slightly lower to 113.1 and NAB’s business surveys performed even worse. The business conditions index dropped from 16 to 9 points, while the business confidence score slid from 10 to 7.
Westpac consumer confidence figures for March will give investors something to think about ahead of tomorrow’s Federal Reserve announcements.
Sterling
The only strong gains made by the Australian Dollar yesterday were against the Pound. Sterling investors were facing up to the reality of the impending Brexit after Parliament overturned the amendments made by the House of Lords to the Brexit bill. Investors are now bracing themselves for the official beginning of divorce proceedings, selling out of the Pound in favour of less volatile currencies.
The most influential of this evening’s UK data is likely to be the average weekly earnings figures for the three months to January. With inflation expected to rise noticeably higher, strong wage growth will be required if households are to avoid a spending squeeze.
Euro
Eurozone data yesterday was mixed and voting in the Dutch elections was just around the corner. This gave investors little incentive to buy into the common currency. The latest German ZEW sentiment scores showed rising optimism, but the figures fell short of expectations. Finalised consumer prices remained at 0.6% on the month and 2.2% on the year, but January’s Eurozone industrial production statistics disappointed. Production grew 0.9% on the month after contracting -1.2% in December, but experts had reckoned on growth of 1.4%. Year-on-year output rose 0.6% – a greater slowdown from 2.5% than the 0.9% economists had posited.
Although the results won’t be known for a while, the Euro is likely to be unsettled as Dutch voters head to the polls today.
US Dollar
The US Dollar was on mixed form yesterday, trading sideways as markets awaited the announcement of the latest monetary policy decisions from the Federal Reserve. Bets of tightening stood at 93%, so investors were hardly interested in yesterday’s low impact data. The potential for the Fed to upgrade their outlook to include three further hikes in 2017, rather than two, was keeping markets from abandoning the US Dollar entirely, but there wasn’t enough momentum to support the ‘Greenback’ much higher.
High-profile consumer price index and advance retail sales data today is unlikely to influence the US Dollar much, given that early tomorrow morning will see the announcement of the Fed’s latest policy decision, the release of the latest Summary of Economic Projections and a press conference with Janet Yellen.
Canadian Dollar
Crude oil hit its lowest levels this year yesterday, dragging the Canadian Dollar lower against some of its peers. Reports by the Organisation of the Petroleum Exporting Countries (OPEC) showed that Saudi Arabia had edged up oil production after cutting further than required by the cartel’s agreement forged towards the end of last year. The kingdom had been compensating for a lack of compliance from other members, so the fact that output rose slightly suggests the world’s global oversupply won’t be curbed as much as first hoped. Brent crude fell -1.75% to within touching distance of the key US$50 per barrel mark, while WTI dropped -2.3% to US$47.30.
Canadian existing home sales data will be released at the turn of midnight tomorrow.
New Zealand Dollar
With the Australian Dollar weak and the Canadian Dollar on mixed form, the New Zealand Dollar was the most reliable of the commodity trio yesterday, recording solid gains across the board. There was no domestic data released, but a slightly higher-than-expected Chinese industrial production figure for February of 6.3% helped improve ‘Kiwi’ appetite.
Data Released
March 15th EUR Netherlands Elections
March 15th 10.30 AUD Westpac Consumer Confidence (MAR) 98.2
March 15th 20.30 GBP Average Weekly Earnings (3M/YoY) (JAN) 2.4%
March 16th 00.00 CAD Existing Home Sales (MoM) (FEB)
March 16th 05.00 USD FOMC Rate Decision (Upper Bound) (MAR 15) 1.00%