Australian Dollar
The domestic data calendar was empty on Friday, leaving the Australian Dollar on mixed form. Despite a couple of minor gains versus weaker currencies, the ‘Aussie’ was largely edging below opening levels. Markets were awaiting the US vote on President Donald Trump’s replacement for the Affordable Care Act (ACA), which was seen as a litmus test for the Republican’s ability to get other campaign pledges approved. This kept Australian Dollar trading thin, as investors were unsure whether to chase yield or find safer assets.
There is no tier-one Australian data set for release in the coming week, but Friday’s Chinese manufacturing PMI is likely to have a considerable impact upon the Australian Dollar.
Sterling
AUD/GBP was able to climb in the last trade session of the week, thanks to fresh concerns over the extent of the Brexit bill that could be presented to the UK once negotiations begin with the EU at the end of the month. Jean-Claude Juncker, European Commission President, claimed in an interview that to settle all financial commitments made by the UK to the EU would cost ‘around’ £50 billion. Such a cost had been speculated over a few weeks ago, but such a solid indication that the charges would indeed be levied unsettled investors. The mood was further soured when data showed mortgage approvals hit a three-month low in February.
Finalised UK GDP figures for the fourth quarter of 2016 are set for release on Friday, although the Pound is likely to encounter turbulence before then as Theresa May intends to trigger Article 50 of the Lisbon Treaty at some point on the 29th (UK time).
Euro
The Euro strengthened on Friday evening after the latest run of Markit PMIs showed an unexpected acceleration in economic activity. Predicted to weaken from January’s levels, the indices for manufacturing, services and composite all improved, showing the pace of private sector growth in the first quarter of 2017 reached a six-year high. According to Markit, the data suggests the Eurozone economy expanded 0.6% in the first quarter; only the second time since the 2012 debt crisis GDP has risen above 0.5%.
German consumer price index data is set for release on Thursday; another rise in inflation will heighten calls for the European Central Bank (ECB) to hike interest rates, which is likely to propel the Euro higher.
US Dollar
A stronger-than-expected durable goods orders figure for February helped the US Dollar advance on Friday night and early Saturday morning. Orders growth was expected to slow from 1.8% to 1.2%, but only dipped to 1.7% month-on-month. Additionally, January’s growth figure was revised half a percentage point higher to 2.3%. However, there were several headwinds facing the ‘Greenback’. The Federal Reserve’s James Bullard commented that he would be ‘okay’ with another interest rate hike this year; not as positive as it seems, considering markets have already priced in a further two, with some investors and economists eyeing three more. Meanwhile, Markit PMIs suggested that the economy slowed in the first quarter.
The first high-profile US data release is scheduled for Tuesday, when the advance goods trade balance for February will be published.
Canadian Dollar
The Canadian Dollar gradually slipped lower on Friday evening after disappointing consumer price index figures. Month-on-month inflation slowed from 0.9% to 0.2% as expected, but annualised inflation also printed lower, clocking in at 2% against forecasts of a reprint at 2.1% in line with January. This marked only the second time inflation has remained at or above the Bank of Canada’s (BOC) target for two consecutive months since the end of 2014, which highlighted the struggle the central bank has had in stimulating growth. Core inflation remained notably below-target at 1.3%.
Bank of Canada Governor Stephen Poloz will be giving a speech, followed by a press conference, very early on Wednesday morning.
New Zealand Dollar
Domestic trade figures somewhat disappointed on Friday, but by the end of the session the New Zealand Dollar was largely making minor gains against its peers. On a positive note, the trade deficit narrowed from -NZ$257 million to -NZ$18 million, but considering forecasts had been for a surplus of NZ$160 million, this naturally disappointed.
Like the Australian Dollar, the New Zealand Dollar will also be heavily influenced by the Chinese manufacturing data, especially given the lack of domestic headline releases this week.
Data Released
March 28th 23.30 USD Advance Goods Trade Balance (FEB)
March 29th 02.10 CAD Bank of Canada Governor Stephen Poloz Press Conference
March 30th 23.00 EUR German Consumer Price Index (YoY) (MAR P) 2.00%
March 31st 12.00 CNY Manufacturing PMI (MAR) 51.6
March 31st 19.30 GBP Gross Domestic Product (YoY) (4Q F) 2.00%