Australian Dollar
The Australian Dollar was stuck around the day’s opening levels yesterday against most of its peers. Domestic data was largely positive, with consumer confidence and business assessment of the current economic conditions improving. However, the NAB business confidence index for March weakened from 7 to 6. Additionally, credit ratings agency Moody’s commented that their latest study of the global housing market had found Australia to be in one of the most precarious positions.
Although the latest Westpac consumer confidence figures are set for release, investors may be more interested in the upcoming Chinese consumer price index.
Sterling
AUD/GBP fluctuated narrowly around opening levels, as the Pound was struggling in the wake of mixed UK inflation data. Headline price growth remained at 2.3% during March as expected, but core price growth slowed from 2% to 1.8% instead of to 1.9% as forecast. This left prices growing above the Bank of England’s (BoE) target, but policymakers will likely point to the below-target level of core price growth as justification for keeping rates frozen.
BoE Governor Mark Carney is set to give a speech today. He is likely to remain unconvinced on the need to tighten monetary policy and, should this be the case, the AUD/GBP exchange rate could see strong gains.
Euro
Strong investor confidence scores kept the Euro in positive territory yesterday, although jitters surrounding the upcoming French presidential elections were softening gains for the common currency. Economic sentiment scores from ZEW for the Eurozone and Germany rose to 11.5 and 19.5 respectively, with the assessment of the current situation in Germany climbing to 80.1. However, investor certainty in the outcome of the French election has been shaken by a late surge in support for leftist candidate Jean-Luc Melenchon. This is a concern for markets because Melenchon provides voters with an alternative to the far-right leader Marine Le Pen and yet wants to hold a referendum on France’s membership of the European Union. This could affect the chances of centrist Emmanuel Macron.
Only low-impact German wholesale price indices are set for release today.
US Dollar
Janet Yellen’s speech yesterday morning disappointed investors and kept the US Dollar marginally below opening levels against its major peers. Yellen said that the Federal Reserve was likely to switch focus from trying to boost the economy to letting it ‘coast’. She said that the pace of future monetary tightening would remain gradual, suggesting it is unlikely there will be three more hikes this year. Yellen also said that any stimulus measures President Donald Trump may be able to implement this year would not have a noticeable effect upon the economy until 2018.
US data is light today, but a speech from the Federal Reserve’s Robert Kaplan could further clarify the outlook on monetary policy.
Canadian Dollar
The Canadian Dollar was largely on the decline yesterday. There was no domestic data to provide support and oil prices were edging back on their Monday gains. Investors across the globe were generally in a risk-off mood, unsettled by the building tensions in Syria and North Korea. This kept demand for the ‘Loonie’ weak.
Midnight tomorrow sees the announcement of the latest monetary policy decisions; given that economists are not expecting a change in interest rates, the April Monetary Policy Report will be of more interest.
New Zealand Dollar
Weak risk appetite and a quiet day for data saw the New Zealand Dollar sliding against its peers yesterday. Credit card spending reports showed an unexpected continuation in the decline in spending on retail, but overall spending grew and the extent of February’s decline was revised smaller. New Zealand was also named on Moody’s report as having one of the most vulnerable housing markets.
The most influential New Zealand data tomorrow will be the truckometer for March, so it is likely the ‘Kiwi’ will respond more to the Chinese consumer price index figures.
Data Released
April 12th 08.00 NZD ANZ Truckometer Heavy (MoM) (MAR)
April 12th 10.30 AUD Westpac Consumer Confidence (APR)
April 12th 11.30 CNY Consumer Price Index (YoY) (MAR) 1%
April 12th 16.00 EUR German Wholesale Price Index (YoY) (MAR) 5.1%
April 12th 18.30 GBP BOE Governor Carney Speaks at Event in London
April 13th 00.00 CAD Bank of Canada Releases April Monetary Policy Report
April 13th 00.00 USD Fed’s Kaplan Speaks in Fort Worth