Australian Dollar
A lack of fresh domestic data limited the movement of the Australian Dollar on Monday, with investors seeing little particular reason to favour the antipodean currency. As the Trump administration threatened to impose further sanctions against Russia, in response to escalating tensions over Syria, the appeal of higher-yielding assets diminished. Even though the Reserve Bank of Australia (RBA) has adopted a somewhat optimistic tone in recent comments the ‘Aussie’ remains rather vulnerable.
If April’s meeting minutes prove more hawkish, though, the Australian Dollar may return to a stronger footing.
Sterling
Even with markets bracing for the latest raft of UK wage and inflation data the downside potential of the Pound was still limited. Investors are confident that the Bank of England (BoE) is likely to raise interest rates at its May policy meeting, in spite of the disappointing nature of some recent domestic data. Hopes for another round of amicable Brexit discussions also bolstered GBP exchange rates at the start of the week.
An improvement in today’s average weekly earnings reading could see Sterling extend its gains further.
Euro
As the Eurozone wholesale price index stagnated on the month in March the mood towards the Euro soured. This weaker showing suggests that inflationary pressure within the currency union remains rather limited, to the detriment of EUR exchange rates. Even so, the single currency found some support on the back of news that Greece ran a stronger-than-forecast budget surplus in the first quarter of 2018.
With forecasts pointing towards a weakening of the German ZEW economic sentiment index the Euro could cede further ground to its rivals this evening.
US Dollar
Although March’s US advance retail sales figure showed a stronger rebound on the month than forecast this failed to offer any particular support to the US Dollar. USD exchange rates came under general pressure as the White House made fresh allegations of currency manipulation against both Russia and China. A weaker-than-expected NAHB housing market index added to the bearishness of the US Dollar.
As the latest US industrial production data is expected to show a moderate loss of momentum in output USD exchange rates may struggle to recover ground in the near term.
Canadian Dollar
Oil prices came under renewed pressure at the start of the week, with an easing in global geopolitical tensions removing some of the commodity’s recent support. As US production continues to rise the sustainability of prices above US$70 per barrel looks rather strained. Speculation over the future of NAFTA also limited the appeal of the Canadian Dollar overnight, with a fresh agreement still not certain.
A solid rebound in tonight’s Canadian manufacturing sales figure could help CAD exchange rates to find a rallying point.
New Zealand Dollar
While the latest New Zealand food price index strengthened solidly on the month this failed to shore up the New Zealand Dollar. Even though the rise of 1.0% points towards stronger inflationary pressure this was not enough to convince investors to pile back into the ‘Kiwi’ at this stage. NZD exchange rates also shrugged off an unexpectedly strong uptick in the services PMI.
Signs of strength within the New Zealand housing market may encourage the New Zealand Dollar to push higher across the board today.
Data Released
April 17th 07:00 NZD REINZ House Sales (YoY) (MAR)
April 17th 11:30 AUD Reserve Bank of Australia Meeting Minutes
April 17th 18:30 GBP Average Weekly Earnings (3M/YoY) (FEB) 3.0%
April 17th 19:00 EUR German ZEW Economic Sentiment Survey Expectations (APR) -1
April 17th 22:30 CAD Manufacturing Sales (MoM) (FEB) 1.0%
April 17th 23:15 USD Industrial Production (MoM) (MAR) 0.4%