Australian Dollar
The Australian Dollar was left directionless on the currency markets yesterday, making only slight gains against the majority of its peers and slipping below opening levels against others. Investors were on hold as Cyclone Debbie – declared a ‘catastrophe’ by the Insurance Council of Australia – was battering the east coast of Australia. Although experts believe the economic impact will be limited, there was little incentive to buy the ‘Aussie’ regardless. The day’s data was underwhelming; new home sales edged up 0.2% and job vacancies growth slowed from 2.5% to 1.8%.
Private sector credit growth data today will show whether Australian businesses are still investing in expansion and equipment.
Sterling
AUD/GBP slumped yesterday as the Pound charged higher, shaking off any jitters investors may have had about the triggering of Article 50 the previous session. There were many factors supporting the Pound higher; profit-taking on short positions, the fact that negotiations proper won’t actually commence for several weeks yet and the fact that the European Commission’s Economic Sentiment Index for the UK rose from 109.4 to an 18-month high of 110.2. Additionally, an EU think tank calculated that Britain’s Brexit bill could be a third or less of the £50 billion figure currently rattling investors.
Consumer confidence data is set for release this morning.
Euro
A run of poor data saw the Euro declining yesterday, with confidence and inflation figures all disappointing. Business, industrial, services and consumer confidence figures for the Eurozone all weakened, with the economic confidence index falling from 108 to 107.9 instead of rising to 108.3. Additionally, German consumer price growth slowed more-than-expected, dropping from 2.2% to 1.6% instead of to 1.8%. While investors had largely been expecting it, as oil prices recently crashed, it did rather prove European Central Bank (ECB) President Mario Draghi’s claim that stronger inflation was related to crude volatility and not the underlying strength of price pressures.
It could be a volatile day for the Euro, what with German unemployment figures and Eurozone consumer price data scheduled for release.
US Dollar
There were several tailwinds which could have pushed the US Dollar higher yesterday, but the ‘Greenback’ largely remained only slightly above opening levels against most of its peers and traded almost flat against the Australian Dollar. Federal Reserve officials Eric Rosengren and John Williams had both commented that four rate hikes would be appropriate, or at least plausible, in 2017. Additionally, GDP figures for the final quarter of 2016 outpaced forecasts at 2.1%, with consumption rising unexpectedly half a percentage point to 3.5%. However, investors were still cautious about buying the ‘Greenback’.
Personal spending figures for February are set for release tonight.
Canadian Dollar
Rising crude oil prices were boosting the Canadian Dollar yesterday. Data from the Energy Information Administration (EIA) revealed that US stocks of crude oil hadn’t risen by as much as forecast, while gasoline and distillate stockpiles had declined more than expected. This pushed WTI even closer to getting back above US$50 per barrel.
Canadian GDP for January is set for release tonight; given that forecasts are for a weakening, the ‘Loonie’ may not perform well.
New Zealand Dollar
The New Zealand Dollar was left slumping after the latest US developments. There was no domestic data to provide support and rising crude oil prices were making the Canadian Dollar a more appealing commodity asset.
New Zealand business confidence data is set for release this morning, although both the ‘Kiwi’ and the ‘Aussie’ may be more vulnerable to the release of March’s Chinese manufacturing PMI than domestic data.
Data Released
March 31st 11.01 GBP GfK Consumer Confidence Survey (MAR) -7
March 31st 12.00 NZD NBNZ Business Confidence (MAR)
March 31st 12.30 AUD Private Sector Credit (MoM) (FEB) 0.5%
March 31st 13.00 CNY Manufacturing PMI (MAR) 51.6
March 31st 21.00 EUR Eurozone Consumer Price Index – Core (YoY) (MAR A) 0.8%
April 1st 00.30 CAD Gross Domestic Product (YoY) (JAN) 0.3%
April 1st 00.30 USD Personal Spending (FEB) 0.2%