Australian Dollar Boosted by Manufacturing PMI Uptick

Australian Dollar (AUD) Lifted as Manufacturing PMI Rises

The Australian Dollar (AUD) pushed higher ahead of the weekend thanks to a stronger-than-expected manufacturing PMI.

While forecasts had pointed towards a slight dip for the PMI it instead climbed from 56.8 to 59.6, demonstrating the solid growth of the manufacturing sector. As the corresponding services PMI also showed a strong uptick on the month investors were encouraged to take a more positive outlook on the Australian economy.

However, with domestic markets closed for the bank holiday the ‘Aussie’ may struggle to maintain its positive footing today.

Pound (GBP) Struggles despite Strong UK Data

The Pound (GBP) remained on the back foot against many of the majors on Friday despite better-than-expected manufacturing and service PMI releases, which indicated business activity expanded at its fastest rate since 2013.

While March’s retail sales data also showed a sharp 5.4% rebound in growth last month, the Pound largely struggled due to strength in its rivals.

With a lack of notable UK data releases this week, lingering worries over the ongoing impact of the Covid-19 crisis may well keep GBP exchange rates on the back foot.

Euro (EUR) Rallies on Stronger Eurozone PMIs

The Euro (EUR) strengthened in response to a positive set of Eurozone manufacturing and services PMIs.

Markets took particular encouragement from the improved services PMI, which unexpectedly returned to a state of expansion at 50.3. This suggests that the Eurozone economy experienced a greater degree of resilience at the start of the second quarter, fostering hopes that a positive growth rate could be on the cards.

Another positive reading from the German IFO business climate index could help the single currency to make further gains this evening.

US Dollar (USD) Softens in Spite of Sharp Services PMI Improvement

The US Dollar (USD) fell out of favour during Friday’s European session in spite of stronger manufacturing and services PMI readings.

Even though April’s flash services PMI bettered expectations, jumping from 60.4 to 63.1, this was not enough to offer USD exchange rates any particular support heading into the weekend. While this strong showing points towards the continued resilience of the service sector, the general lack of safe-haven demand saw the US Dollar kept on the back foot.

However, with forecasts pointing towards a solid rebound in March’s durable goods orders figure the appeal of the US Dollar could improve tonight.

Canadian Dollar (CAD) Fails to Benefit from Positive Wholesale Sales

The Canadian Dollar (CAD) struggled to capitalise on a positive wholesale sales figure ahead of the weekend.

While sales showed a recovery on the month, rising 0.9% in the wake of February’s -0.7% contraction, this was not enough to give the Canadian Dollar any fresh boost. As the impact of the Bank of Canada’s (BOC) optimistic commentary continued to fade, this left CAD exchange rates biased to the downside.

Any weakness in the global oil market could see the Canadian Dollar shedding further ground over the course of the day.

New Zealand Dollar (NZD) Bolstered by Credit Card Spending Uptick

The New Zealand Dollar (NZD) rallied as March’s credit card spending data delivered an unexpectedly positive showing.

Forecasts had pointed towards another contraction in spending on the year, leaving the ‘Kiwi’ to trend sharply higher once the figure clocked in at 2.2% instead. With consumer spending recovering from the impact of the pandemic worries over the health of the wider economy diminished, to the benefit of NZD exchange rates.

Without the support of any fresh economic data releases, though, the New Zealand Dollar could find itself trending lower today.

Data Releases

18:00 EUR Germany IFO Business Climate Index (Apr) 97.7
22:30 USD Durable Goods Orders (Mar) 1.8%

Louisa Heath