Chinese Trade Decline Fails to Weigh Down Australian Dollar
As Chinese trade data fell short of forecast this left AUD exchange rates on a weaker footing on Friday. With signs continuing to point towards a loss of momentum within the global economy, driven by increased trade tensions, the mood towards the commodity-correlated Australian Dollar naturally soured. However, AUD exchange rates were able to find a rallying point heading into the weekend as the latest US jobs data disappointed investors.
If market risk appetite sees any fresh deterioration today the Australian Dollar is likely to return to a downtrend, though.
Lack of Brexit Progress Keeps Pound Under Pressure
Demand for the Pound slumped during Friday’s European session as officials failed to make any progress towards a mutually agreeable Brexit deal. As the issue of the Irish border continued to frustrate discussions this gave investors fresh incentive to sell out of the Pound ahead of the weekend. With the deadline now less than a month away GBP exchange rates look set to come under increasing pressure as a result of Brexit-based uncertainty.
Without any breakthrough in negotiations the Pound may struggle to find any particular support in the near term.
Euro Shakes Off Factory Orders Contraction
German factory orders proved disappointing in January, unexpectedly falling -2.6% on the month. This latest sign of weakness from the German manufacturing sector suggests that the Eurozone’s powerhouse economy continued to struggle at the start of 2019. With growth across the currency union looking set to deteriorate further the upside potential of the Euro was limited. Even so, the decline of the US Dollar still helped to shore up EUR exchange rates.
A widening of the German trade surplus could offer the Euro a stronger rallying point this evening, with resilient trade likely to support the wider economy.
Disappointing Payrolls Report Knocks US Dollar
February’s US non-farm payrolls report did not paint an encouraging picture, with the headline figure showing that only 20,000 new jobs were added to the economy last month. This dramatically undershot market forecasts, raising concerns over the health of the US labour market. Although the corresponding unemployment rate still saw an improvement this was not enough to keep USD exchange rates from trending lower.
An uptick in tonight’s advance retail sales data could encourage the US Dollar to recover some of its lost ground, however.
Canadian Dollar Weighed Down by Slowing Wage Growth
While February saw a larger increase in net employment than forecast this failed to benefit the Canadian Dollar. Investors were more concerned by a surprise decline in wage growth on the year, something which is likely to give the Bank of Canada (BOC) greater incentive to maintain a dovish policy bias. A decline in the fourth quarter capacity utilisation rate also weighed on CAD exchange rates, with confidence in the strength of the Canadian economy diminishing.
Without the support of domestic data the Canadian Dollar looks set to remain on the back foot today.
Manufacturing Activity Rebound Boosts New Zealand Dollar
The sharp decline in Chinese exports was not enough to dent the New Zealand Dollar on Friday, even as worries over the global growth outlook mounted. NZD exchange rates held onto an uptrend in the wake of the fourth quarter manufacturing activity volume index, which saw a solid rebound on the quarter. This improvement in the manufacturing sector gave investors reason to favour the New Zealand Dollar over its rivals once again.
Any slowdown in retail card spending could see NZD exchange rates come under renewed pressure this morning, though.
March 11th 08:45 NZD Retail Card Spending (MoM) (FEB)
March 11th 18:00 EUR German Trade Balance (JAN) 14.4 billion
March 11th 23:30 USD Advance Retail Sales (MoM) (JAN) 0.1%