Australian Dollar
Geopolitical concerns, coupled with the adverse reaction to the latest Reserve Bank of Australia (RBA) meeting minutes, weakened the Australian Dollar yesterday. Donald Trump’s latest executive order attempts to put into practice some of his ‘Buy American, Hire American’ campaign rhetoric, which has sparked concerns amongst nations that trade heavily with the States. Even forecasts from the International Monetary Fund (IMF) that the Australian economy would benefit from recovering commodities and falling unemployment failed to entice investors into the ‘Aussie’.
Australia’s NAB business confidence index for the first quarter will be the most influential data released today.
Sterling
AUD/GBP had slumped to its worst level since the beginning of the year yesterday. The Pound continued to be supported by the news the UK would head to the polls for a general election on June 8th. Markets believed the vote would return a stronger Conservative majority. Not only does this remove political instability, but it also increases the chances of Tory MPs who are more moderated in their views on Brexit gaining seats. This would help dilute the influence of the small majority of hard line Brexiters on the backbenches and could allow Theresa May to pursue a ‘softer’ Brexit.
Traders could get some more clues on the outlook for UK monetary policy today if Bank of England (BoE) Governor Mark Carney gives any hints during a speech at an event in Washington.
Euro
Finalised inflation figures may have shown the pace of Eurozone price growth slowed from 2% in February to 1.5% in March, but the Euro was nonetheless on the rise. Investors had expected the slowdown and knew that it was largely attributable to the fact that Easter fell later this year. Additionally, the latest IMF World Economic Outlook had revised upwards slightly its expectations for Eurozone growth this year.
Only low-impact Eurozone data is set for release today, such as German producer prices figures for March and the Eurozone construction output figures for February.
US Dollar
Despite a general lack of economic data yesterday, the US Dollar was largely on the rise. Steven Mnuchin, the Treasury Secretary, tried to diffuse market fears that President Donald Trump was attempting to jawbone USD lower, stating his comments about the ‘Greenback’ being too strong were ‘absolutely not’ an attempt to talk it down.
The US data scheduled for release today is likely to have little influence over the US Dollar. The number of initial jobless claims made last week is expected to have edged up to 242,000, but this won’t perturb investors; anything below 300,000 is considered a healthy number.
Canadian Dollar
While the Canadian Dollar did better than its commodity brethren yesterday, it weakened against safer currencies like the Pound, Euro and US Dollar. Crude oil had held its gains for much of the day, but the latest stockpiles data from the US showed that inventories decreased by a smaller amount than was expected.
New Zealand Dollar
Geopolitical concerns were weighing on the New Zealand Dollar yesterday. Traders were also selling the ‘Kiwi’ to take advantage of the strong rise seen early yesterday morning after dairy prices rose at the latest global auction.
Today’s first-quarter consumer price index figures are expected to show an uptick in the pace of inflation, which is likely to support the New Zealand Dollar higher.
Data Released
April 20th 08.45 NZD Consumer Prices Index (YoY) (1Q) 2.0%
April 20th 11.30 AUD NAB Business Confidence (1Q)
April 20th 16.00 EUR German Producer Prices (YoY) (MAR) 3.2%
April 20th 21.30 GBP BOE’s Carney Speaks at Bank of France Event, Washington
April 20th 22.30 USD Initial Jobless Claims (APR 15) 242k