Australian Dollar
The Australian Dollar was on mixed form on Friday, making solid gains against many of its peers but weakening versus the Pound and the Euro. There was a lack of fresh economic data, but the weakness in the US Dollar, thanks to continued political concerns, boosted commodity prices. Additionally, the continued clampdown on polluting Chinese steel mills had seen stocks of the material near-halve recently, boosting prices and therefore lifting the value of iron ore futures. All this allowed the ‘Aussie’ to drift higher.
It’s a very quiet week for Australian data this week, with the Westpac Leading Index being one of the few notable releases. This looks to predict the future trajectory of the economy, so a positive figure may provide some support for AUD.
Sterling
The Australian Dollar slid against the Pound on Friday thanks to some positive UK factory data. The Confederation of British Industry (CBI) revealed that order volumes increased at the fastest pace since February 2015, while output rates climbed to a high not seen since December 2013. Despite the fall in consumer spending, weakening Sterling exchange rates, coupled with the continued global economic recovery, are helping support demand for manufacturers.
The next estimate of the UK’s first-quarter GDP is set for release on Thursday. This estimate takes into account more data than the first one, meaning projections for how the economy performed in the first three months of the year could be revised higher or lower.
Euro
German data and Greek developments boosted the Euro on Friday. In a positive sign for inflationary pressures, German producer prices rose 0.2% above forecasts both on the month and the year, increasing 0.4% and 3.4% respectively. Additionally, the Euro was supported by the news that the Greek Parliament had approved the latest austerity measures stipulated by Eurogroup creditors. This means it is likely the next €7.5 billion tranche of bailout funds will be unlocked next week; money Greece desperately needs given that it has debt maturing in July.
There is no top-tier Eurozone data set for release this week, but the German GfK consumer confidence survey will help gauge the pace of future consumer price growth in the Eurozone’s powerhouse economy.
US Dollar
Political turbulence continued to keep the US Dollar firmly on the decline on Friday. Market jitters were evident in the fact that gold – considered an investment safer than USD – had seen prices climb to a five week high. Former FBI Director James Comey released a statement saying that he had not been subjected to political pressure to drop investigations into the links between former National Security Advisor Michael Flynn and Russia. However, this failed to incite confidence in the current administration and the ‘Greenback’ suffered.
US GDP figures for the first quarter are set for release on Friday night.
Canadian Dollar
The Canadian Dollar slumped on Friday thanks to poor data. While March’s retail sales figures showed above forecast growth of 0.7% compared to expectations of 0.3%, inflation figures were less impressive. Consumer price growth accelerated from 0.2% to 0.4% on the month in April and remained at 1.6% on the year; -0.1% below predictions in both cases. Even though crude oil was trending higher by around 1.5%, the ‘Loonie’ continued to notch up losses.
The Bank of Canada (BOC) announces its latest monetary policy decisions at midnight on Thursday. No change is expected, but should communications from the committee suggest a more positive outlook on the economy the Canadian Dollar could still receive a boost.
New Zealand Dollar
Commodity indices were up and the US Dollar was falling, yet Friday saw the New Zealand Dollar either declining or stuck around opening levels. Credit card spending continued to grow 0.9% on the month in April, while net migration edged down from its record 6100 in March to 5780 in April; still a high number that could put pressure on government coffers. Overall there simply wasn’t a strong enough tailwind to push the ‘Kiwi’ up.
New Zealand trade figures covering April are set for release on Wednesday.
Data Released
May 24th 08.45 NZD Trade Balance (New Zealand dollars) (APR)
May 24th 10.30 AUD Westpac Leading Index (MoM) (APR)
May 24th 16.00 EUR German GfK Consumer Confidence Survey (JUN) 10.2
May 25th 00.00 CAD Bank of Canada Rate Decision (MAY 24) 0.50%
May 25th 18.30 GBP Gross Domestic Product (YoY) (1Q P) 2.1%
May 26th 22.30 USD Gross Domestic Product (Annualized) (1Q S) 0.9%