Australian Dollar
A strong performance of service index from AiG for March boosted the Australian Dollar higher against most of the majors yesterday, but the ‘Aussie’ was unable to find any particular strength. Markets were awaiting the latest US data and the Federal Open Market Committee (FOMC) meeting minutes before deciding how to position on certain currencies, which kept demand for the risky Australian Dollar muted.
The only event on the economic calendar for Australia today is a speech from the Reserve Bank of Australia’s (RBA) Guy Debelle.
Sterling
The Australian Dollar weakened against the Pound yesterday after the latest UK services PMI showed an unexpectedly strong acceleration in sector activity. Expected to inch up from 53.3 to 53.5, the index from Markit rose to 55. This more than offset the weakness in the earlier manufacturing and construction PMIs, pushing the composite index for March up from 53.8 to 54.9. This helped to allay fears that the UK’s economy was likely to have slowed in the first quarter of the year, driving Pound exchange rates higher.
Euro
Finalised Eurozone PMIs for March may have been revised lower on earlier estimates yesterday, but they nonetheless showed that the currency bloc was indeed at its strongest level in nearly six years. Only Germany’s service and composite PMIs escaped downwards revision, with the former remaining at 55.6 and the latter edging up to 57.1. However, the Euro was on decidedly mixed form, with anticipation of the latest US data keeping investors away from the common currency.
A speech by European Central Bank (ECB) President Mario Draghi will be the highest-profile development on the economic calendar for the Eurozone today.
US Dollar
The US Dollar was mixed yesterday as markets awaited the release of the FOMC meeting minutes early this morning. With some policymakers having stated that no further rate hikes are needed this year, while others continue to support multiple additional hikes, investors were looking to the meeting minutes to provide greater clarity. This meant the ‘Greenback’ ignored the latest positive data, such as climb in the ADP employment change index to 263,000, which suggests the non-farm payrolls report this week may also perform strongly.
Assuming the markets aren’t too fixated by the latest FOMC meeting minutes, the US initial jobless claims figures could provoke some movement from the US Dollar.
Canadian Dollar
Crude oil prices were firmly on the rise, but the Canadian Dollar’s strength yesterday was more tenuous. The ‘Loonie’ managed to rise against the Euro, US Dollar and New Zealand Dollar, but remained stuck below opening levels versus the Australian Dollar and the Pound. WTI and Brent crude were both up around 1.2%, but a lack of any domestic data meant the Canadian Dollar had little support overall.
The only Canadian data set for release today is building permits figures for February.
New Zealand Dollar
Dairy prices had risen at the latest auction, but even a 1.6% rise only took the average price up to US$3,101. This is still significantly below the best levels of the year, so investors were not overly impressed. Generally low levels of risk-appetite ahead of the US releases weighed heavily on the New Zealand Dollar, causing it to weaken against most of the majors.
Data Released
April 6th 08.40 AUD RBA’s Debelle Speech in Sydney
April 6th 17.00 EUR ECB President Draghi speaks in Frankfurt
April 6th 22.30 CAD Building Permits (MoM) (FEB)
April 6th 22.30 USD Initial Jobless Claims (APR 01) 251k