Australian Dollar
There were several positive factors boosting the Australian Dollar on Friday. What little domestic data there was printed well, with a strong rise in credit card purchases suggesting that consumers were in the mood to spend more – which bodes well for inflationary pressures. Additionally, US data was poor, weakening appetite for the safer asset and boosting demand for the riskier ‘Aussie’.
Australian employment change and unemployment data covering April is set for release on Thursday.
Sterling
AUD/GBP was bullish on Friday, as markets continued to digest the poor UK data released on Thursday, along with the dovish tone adopted by Bank of England (BoE) Governor Mark Carney during his latest press conference. There were no new economic releases or developments, giving traders little incentive to buy or hold Sterling.
UK consumer prices are set for release on Tuesday; with the Bank of England (BoE) remaining firm on the need to look through strong inflation, markets may not respond positively to signs of further price pressures.
Euro
Although it made minor losses against the Australian Dollar, elsewhere the Euro was able to record minor gains. The latest estimate for German 1st quarter GDP clocked in at an above-forecast 2.9% on a non-seasonally adjusted basis. Industrial production figures from the Eurozone weren’t so rosy, however, with month-on-month production declining -0.1% instead of growing 0.3%, while year-on-year output rose from 1.4% to 1.9% instead of to 2.3% as economists had expected.
Italian and Eurozone GDP figures for the first quarter are set for release on Tuesday.
US Dollar
The day’s US data disappointed on Friday. Overall consumer prices grew 2.2% in April, compared to forecasts of 2.3%, while core prices also disappointed expectations by -0.1% to print at 1.9%. Advance retail sales for March were revised to show marginal growth instead of a contraction, but only expanded 0.4% instead of 0.6% in April. For a long time economists have argued over whether the US economy is in a strong or weak position; Friday’s data leant towards suggesting the latter.
There is comparatively little US data on the calendar this week, with initial and continuing jobless claims figures on Thursday likely to be among the most influential releases of the coming days.
Canadian Dollar
The Canadian Dollar was largely on the decline on Friday, even though oil prices were on track to register their biggest gain in five weeks. This was on the back of building expectations OPEC would extend the duration of its oil production cut beyond the middle of 2017, but the Canadian Dollar did not respond positively. The latest housing price index figures showed a 1.2% monthly rise in property values; a somewhat worrying development given that the overheating housing market was cited by Moody’s as one of the reasons for recently cutting the credit ratings of six major Canadian banks.
Consumer price index figures for April are set for release on Friday, which may distract the Canadian Dollar from developments on the oil markets.
New Zealand Dollar
The New Zealand Dollar was shakily recovering from the recent surprise dovishness of the Reserve Bank of New Zealand (RBNZ) following its latest monetary policy meeting. The day’s economic data was unsupportive, with year-on-year figures for April showing a -31% decline in house sales, while the Business NZ performance of manufacturing index declined from 58 to 56.8.
The results of the latest global dairy auction will be announced on Tuesday. Prices have risen during the last four events, so another increase would further improve the outlook of the New Zealand economy and raise demand for the ‘Kiwi’.
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%