Australian Dollar
The Australian Dollar was on strong form yesterday after the latest labour market data significantly beat expectations. Employment was expected to have grown by 5,000 in April, but instead increased 37,400. The unemployment rate had been pegged to hold at 5.9%, yet actually decreased to 5.7%. The only dampener was that the economy actually shed -11,600 full-time jobs, with a large increase seen in the number of part-time workers. However, this was not sufficient to stymie the ‘Aussie’s advance.
Sterling
AUD/GBP fell yesterday with the Pound on bullish form elsewhere thanks to above-forecast UK retail sales figures. On the month retail sales rose 2% in April – double the growth forecast – while March’s decline was cut to -1.2%. On the year sales grew 4.5% from an upwardly-revised 2.8% in March. This helped soften fears that rocketing consumer prices were dampening UK household spending, thereby improving the outlook of the economy.
CBI orders and selling prices figures are the only UK data set for release today.
Euro
The Euro was soft yesterday after the accounts of the latest European Central Bank (ECB) monetary policy meeting revealed that the Governing Council remains strongly divided over the health of the Eurozone economy. While some members argued that the fact the economy remained resilient to political risks was a sign of its strength, others argued that low wage growth, coupled with a lack of business investment, still threatened the currency bloc. Additionally, Chief Economist Peter Praet warned board members to be cautious when discussing the potential for tapering the quantitative easing programme, lest they cause market volatility. This could mean there will be little hint of such a move happening until it is suddenly announced; an uncertainty investors will not appreciate.
There is little on the Eurozone data calendar today, but Eurozone consumer confidence figures will be released at midnight tomorrow.
US Dollar
The current scandal enveloping the White House continued to weigh on the US Dollar yesterday, causing the ‘Greenback’ to weaken against the majority of its peers. In response to the news that he allegedly told former FBI Director James Comey to cease an investigation into the ties between National Security Advisor Michael Flynn and Russia, Donald Trump claimed that he was being treated worse and more unfairly than any other politician in history. This all continued to undermine faith in the current administration and its ability to pass key tax and spending reforms when distracted by controversy and while Trump makes more enemies within his own party.
The only US development on the data calendar today is a speech on the US economy and monetary policy from the Federal Reserve’s James Bullard. He has recently been very cautious on the idea of raising interest rates again during 2017, so his comments are likely to lower the odds on further monetary tightening.
Canadian Dollar
Crude oil declined sharply yesterday, dragging the Canadian Dollar down with it. Although the latest data showed US crude oil inventories fell by -1.75 million barrels in the week ending May 12th, this was just under a million barrels lower than forecast. This suggested that the OPEC production cut was struggling to have much effect on the overall oil supply.
Today could see volatile movement for the Canadian Dollar, thanks to the release of consumer price figures for April this evening.
New Zealand Dollar
The New Zealand Dollar was either declining or stuck around opening levels versus many of the major currencies yesterday, despite some positive domestic data. The ANZ consumer confidence index rose from 121.7 to 123.9 in May; an increase of 1.8%. However, considering sentiment fell -2.8% in April, this rise still leaves households feeling less optimistic about the economy than they were in March. However, the latest US developments were unsettling the markets and the risky New Zealand Dollar was therefore left unappealing.
Card spending data for April is the only notable New Zealand data set for release today.
Data Released
May 19th 13.00 NZD Credit Card Spending (YoY) (APR)
May 19th 20.00 GBP CBI Trends Selling Prices (MAY) 29
May 19th 22.30 CAD Consumer Price Index (YoY) (APR) 1.7%
May 19th 23.15 USD Fed’s Bullard to Speak about U.S. Economy and Monetary Policy
May 20th 00.00 EUR Eurozone Consumer Confidence (MAY A) -3