Australian Dollar Weakens as Retail Sales Disappoint

Australian Dollar (AUD) Dented by Poor Retail Sales Figures

The Australian Dollar (AUD) fell on Friday, undermined by the Australia’s latest retail sales figures. The Australian Bureau of Statistics reported domestic sales growth declined by 0.3% in January, following a contraction of 0.7% in December. Fortunately for AUD investors the resulting drop in the ‘Aussie’ proved limited as a slump in the US Dollar helped buoy risk appetite.

Looking ahead we expect the Australian Dollar to remain sensitive to coronavirus headlines in the coming week, potentially capping any upside in the currency as the continued spread of the disease weighs on market risk appetite.

Pound (GBP) Stable on Hawkish BoE

The Pound (GBP) held steady at the end of last week, buoyed by the Bank of England’s (BoE) apparent resistance to implement any emergency rate cuts. However, at the same time the upside in Sterling was capped as lingering Brexit uncertainty continued to weigh on sentiment.

In focus for GBP investors this week will be the publication of the UK’s Budget. Will the UK be able to deliver on its ambitious spending plans or will the coronavirus have forced a rethink from the Chancellor?

Euro (EUR) Surges amid USD Sell-Off

The Euro (EUR) pushed higher on Friday thanks to broad weakness in the US Dollar (USD). Further buoying the Euro was the publication some impressive data from Germany, with factory orders jumping by 5.5% in January, the largest monthly increase in over five years.

The Euro may extend these gains at the start of this week’s session if German industrial production also impresses this evening.

US Dollar (USD) Battered by Fed Rate Cut Speculation

The US Dollar (USD) tumbled at the end of last week’s session on expectations that the Federal Reserve is planning an additional rate cut this month, after announcing an emergency cut last week. As more coronavirus cases emerge in the US, markets are betting on the Fed cutting rates by an additional 75 basis points at its next policy meeting later this month. The expectation for more rate cuts saw the US Dollar slump on Friday even with US payrolls reporting their largest rise since May 2018.

Looking ahead, the US Dollar could face additional pressure this week if USD investors continue to be spooked by a rise in domestic coronavirus cases.

Canadian Dollar (CAD) Undermined by Rout in Oil Prices

The Canadian Dollar (CAD) was left licking its wounds on Friday as the oil-sensitive currency plunged after WTI crude collapse below $42 a barrel to strike a fresh three-year low. The tumble in oil prices comes after OPEC failed to agree upon additional production cuts.

New Zealand Dollar (NZD) Fluctuates amid Coronavirus Concerns

Trade in the New Zealand Dollar (NZD) was mixed at the end of last week’s session as coronavirus developments left investors jittery.

Data Releases

March 9th 17:00 EUR German Industrial Production (Jan) 1.7%
March 9th 17:00 EUR German Trade Balance (Jan) €13.4bn

Louisa Heath

louisa.heath@torfx.com


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