Rising Unemployment Limits Australian Dollar Appeal
As the unemployment rate picked up from 4.9% to 5.0% in March the Australian Dollar was left on a weaker footing. Investors were disappointed that the labour market failed to show any fresh signs of tightening, even though the participation rate did see a modest improvement on the month. Coupled with a negative first quarter NAB business confidence index this exposed AUD exchange rates to fresh selling pressure.
Signs of resilience in April’s manufacturing and services PMIs could offer the Australian Dollar a rallying point as markets look for signs of greater economic resilience.
Retail Sales Surge Not Enough to Benefit Pound
March’s UK retail sales data surprised to the upside ahead of the Easter weekend, showing a 6.2% acceleration on the year. However, this positive showing failed to give GBP exchange rates any real boost as markets took little encouragement from the data. As the figures were distorted by the weak nature of 2018’s March data, which was weighed down by adverse weather conditions, the Pound remained under pressure.
As long as progress towards a finalised Brexit deal continues to prove elusive GBP exchange rates look set to maintain a weaker footing.
Euro Slumps as Eurozone Manufacturing Sector Continues Contraction
The latest Eurozone manufacturing and services PMIs saw the Euro falter as the economy continued to show signs of slowing at the start of the second quarter. While the manufacturing PMI showed a slight improvement on the month the figure remained firmly within contraction territory. With economic momentum proving generally limited the single currency slumped across the board during Thursday’s European session.
With tonight’s Eurozone consumer confidence index also set to remain in negative territory EUR exchange rates may struggle to recover their lost ground in the near future.
Weakening Business Confidence Fails to Weigh Down US Dollar
Despite a disappointing decline in April’s Philadelphia Fed business outlook index the mood towards the US Dollar improved last week. After a weak month in February US advance retail sales surged higher, climbing 1.6% as consumer spending picked back up once again. Coupled with another week of improved initial and continuing jobless claims figures this encouraged USD exchange rates to push higher across the board.
If tonight’s Richmond Fed manufacturing index fails to show an improvement on the month, though the appeal of the US Dollar could diminish again.
Resilient Retail Sales Boost Canadian Dollar
Canadian retail sales bettered forecast in February, rebounding with growth of 0.8% and improving confidence in the underlying health of the domestic economy. With Canadian consumers shaking off economic anxiety investors were encouraged to bet on the prospect of a stronger month of growth. The continued strength of the oil market also lent support to CAD exchange rates as Brent crude remained comfortably above US$71 per barrel.
Another solid reading from February’s wholesale trade sales figure could offer the Canadian Dollar an additional boost this evening.
New Zealand Dollar Slides as Markets Brace for Rate Cut
NZD exchange rates remained on a downtrend in the wake of the first quarter consumer price index ahead of the weekend. With the Reserve Bank of New Zealand (RBNZ) looking set to cut interest rates in the near future investors found little incentive to buy into the New Zealand Dollar. With the US Dollar also strengthening the risk-sensitive currency fell further out of favour.
A strong month of credit card spending could help to return NZD exchange rates to a positive footing this morning, however.
Data Releases
April 23rd 09:00 AUD Composite PMI (APR)
April 23rd 13:00 NZD Credit Card Spending (YoY) (MAR)
April 23rd 22:30 CAD Wholesale Trade Sales (MoM) (FEB) 0.4%
April 24th 00:00 USD Richmond Fed Manufacturing Index (APR)
April 24th 00:00 EUR Eurozone Consumer Confidence (APR) -7.1