Australian Dollar
The Australian Dollar was on mixed form on Friday, but was largely in negative territory overall. Domestic data was disappointing, with home loans falling -1.9% in April – almost double the forecast – investment lending down -2.3% and the value of loans down -1.1%. While the Chinese consumer price index accelerated from 1.2% to 1.5% as expected, May’s producer price index weakened from 6.4% to 5.5%. This suggests that Australian exporters have been receiving less money for their goods from Chinese manufacturers, pointing to weaker export revenue.
Australian employment change and unemployment rate figures for May are set for release on Thursday.
Sterling
AUD/GBP was inching lower on Friday, but only after striking a seven-and-a-half-week high following the result of the UK’s general election. The initial exit poll shocked by predicting a hung parliament and the final ballot shocked again by proving it right. The Conservative Party ended up eight seats short of a majority and had to enlist the help of Northern Ireland’s Democratic Unionist Party (DUP) with their ten seats in order to clinch a tiny majority. But many both within and without the Tory party are claiming Theresa May’s position as Prime Minister is untenable.
It will be interesting to see if Tuesday’s inflation data for May will be enough to distract markets from their strong political focus at the moment. Given that the unstable situation in Parliament could create uncertainty for businesses and create problems for the Brexit process, the Bank of England (BoE) may have even more reason to avoid hiking interest rates in the near-term. This could render CPI figures moot.
Euro
The Euro was largely on the decline on Friday. Appetite for the common currency remained soft after the latest disappointing round of announcements from the European Central Bank (ECB) following its monetary policy meeting earlier this week. Additionally, the result of the UK election was unsettling many Euro investors, given that a hung parliament could prolong and confuse Brexit; a process that is expected to damage the economies of EU countries as well as the UK.
The German ZEW economic sentiment survey for June is the only tier-one economic release due from the Eurozone this week.
US Dollar
The US Dollar was on soft, but positive, form on Friday, with markets mildly relieved that the testimonial of former FBI Director James Comey had not revealed anything that might overly threaten the current US administration. This means that President Donald Trump may be free to focus on his tax and spending plans, so hopes of a stronger economy on the back of a US$1 trillion stimulus injection are being rekindled once again.
The Australasian currency markets are likely to wake up on Thursday morning to find that the Federal Reserve has raised interest rates, so the US Dollar could receive a boost – albeit a small one, as monetary tightening is largely priced-in.
Canadian Dollar
Strong labour market data was pushing the Canadian Dollar higher across the board on Friday. The employment change figure smashed expectations, showing 54,500 new hires in May, compared to forecasts of an increase of 11,000. There was a notable swing from part-time work, which decreased by -22,300 persons, to full time, which saw an increase in hiring of 77,000. This helped the ‘Loonie’ to ignore the fact that the crude oil markets were stagnating.
The only piece of Canadian data that isn’t considered low impact this week is Thursday’s existing home sales data from May.
New Zealand Dollar
The New Zealand Dollar was on weak form on Friday, either clinging on to opening levels or edging below them. There was no domestic data published and commodity prices weren’t overly benefitting from the soft US Dollar, so the ‘Kiwi’ had little in the way of support.
New Zealand GDP figures for the first quarter are set for release on Thursday.
Data Released
June 13th 18.30 GBP Core Consumer Price Index (YoY) (MAY) 2.3%
June 13th 19.00 EUR German ZEW Survey (Economic Sentiment) (JUN) 21
June 15th 04.00 USD Federal Open Market Committee Rate Decision (JUN 14) 1.25%
June 15th 08.45 NZD Gross Domestic Product (YoY) (1Q)
June 15th 11.30 AUD Employment Change (MAY) 10k
June 15th 23.00 CAD Existing Home Sales (MoM) (MAY)