Australian Dollar
The Australian Dollar slumped yesterday after disappointing consumer price index figures for the first three months of 2017. Prices grew 0.5% on the quarter and 2.1% on the year; estimates had been for 0.6% and 2.2% respectively. While this was enough to cause economists to soften their calls for the Reserve Bank of Australia (RBA) to cut interest rates, the figures also suggested that price growth would remain sluggish.
The Australian Dollar may find itself little moved by today’s data calendar, which promises only low-impact first-quarter import price figures.
Sterling
AUD/GBP tumbled yesterday, although the Pound was on more mixed form elsewhere. There was no UK data released, giving traders little additional information following Tuesday’s strong government spending figures.
The Confederation of British Industry (CBI) will release sales figures for April today; these are expected to weaken and could further heighten fears that the economy is beginning to slow.
Euro
A strengthening US Dollar undermined the Euro yesterday. Investors were prompted to sell the common currency after two days of strong gains thanks to the French Presidential Election results. An empty Eurozone data calendar and interesting developments over in the States incentivised traders to lock in profits, sending the Euro lower.
There is plenty of potential for Euro volatility today, as the European Central Bank (ECB) announces its latest monetary policy decisions and German consumer price figures are released.
US Dollar
The US Dollar was largely notching up strong gains yesterday after Treasury Secretary Steve Mnuchin confirmed that President Donald Trump’s tax reforms included plans to slash business taxes from 35% to 15%. He also commented that he believed the government could achieve GDP of 3% per year, which is nearly double the 1.6% rate seen in 2016, even if it is lower than the 4% promised on the White House website.
There are two big releases on the US data calendar tonight; the advance goods trade balance and preliminary durable goods figures.
Canadian Dollar
Despite poor domestic data, weakening oil prices and a reignited debate over lumber with the US, the Canadian Dollar was recording strong gains yesterday. Data showed that retail sales had unexpectedly fallen in February, declining -0.6% instead of stagnating after January’s 2.3% growth. Crude oil prices were down around -0.8% due to large US stockpiles and general fears about the global oversupply. Meanwhile, news that the Trump administration had levied 20% tariffs on Canadian lumber imports threatened to create friction with Canada’s largest trade partner.
New Zealand Dollar
Trump recently took aim at Canada regarding its dairy exports to the US, which he claimed were making business for US dairy farmers ‘very difficult’. His warning that ‘we will not stand for this’ unsettled investors, who feared his attention could soon turn to New Zealand – the world’s largest exporter of milk. The US taking steps to lower the competitiveness of New Zealand’s dairy exports could have a significant negative impact upon the New Zealand economy and so NZD slumped yesterday.
Data Released
April 27th 11.30 AUD Export Price Index (QoQ) (1Q) 8%
April 27th 20.00 GBP CBI Retailing Reported Sales (APR)
April 27th 21.45 EUR European Central Bank Rate Decision (27 APR) 0.00%
April 27th 22.30 USD Durable Goods Orders (MAR P) 1.2%