Australian Dollar (AUD) Lacks Support
The Australian Dollar (AUD) struggled to find much support ahead of the weekend in the absence of Australian economic data releases.
A lack of market risk appetite also kept AUD exchange rates under a degree of pressure, with demand for higher-yielding assets limited.
Anticipation ahead of tomorrow’s release of the Reserve Bank of Australia’s (RBA) meeting minutes may add to the bearishness of AUD exchange rates.
Pound (GBP) Slips on Comments from BoE Governor
The Pound (GBP) softened in the wake of comments from Bank of England (BoE) Governor Andrew Bailey.
As Bailey indicated that inflation is unlikely to remain at elevated levels for long, the Pound was left vulnerable to selling pressure. With the central bank looking set to maintain its current dovish policy outlook for the foreseeable future, GBP exchange rates struggled to find any traction.
However, as the UK takes its next step in easing national lockdown conditions, this could help to keep a floor under the Pound, although rising concerns over coronavirus variants could limit the upside in GBP.
Euro (EUR) Muted as ECB Minutes Show No Change
The Euro (EUR) saw limited movement after the release of the European Central Bank’s (ECB) most recent set of meeting minutes.
The minutes offered nothing in the way of surprises, generally reaffirming the message that the central bank has already been giving. With the ECB looking set to remain on hold for months, the single currency found itself lacking in any particular momentum heading into the weekend.
In the absence of any fresh Eurozone data releases today, the mood towards the euro may well remain muted.
US Dollar (USD) Dented as Retail Sales Stagnate
The US Dollar (USD) slumped sharply on Friday as April’s retail sales data fell short of forecast, failing to show any growth on the month.
While investors had expected to see a slowdown in growth after March’s major 9.8% jump, they were still caught off guard as sales instead stagnated on the month. This major slowdown in sales momentum put a dampener on the US Dollar, fuelling anxiety over the health of the world’s largest economy at the start of the second quarter.
A decline in the New York Empire State manufacturing index could see USD exchange rates extend their losses further this evening.
Canadian Dollar (CAD) Benefits from Stronger Wholesale Sales
The Canadian Dollar (CAD) picked up as March’s finalised wholesale sales figure proved stronger than anticipated.
As sales jumped 2.8% on the month, as opposed to the initially estimated 1% increase, this reversed the impact of February’s -0.7% decline. Coupled with the strength of the latest manufacturing sales figure, this suggests that the economy remained on a stronger footing in March, bolstering the appeal of the Canadian Dollar.
However, a smaller April housing starts figure could put some pressure on CAD exchange rates overnight.
New Zealand Dollar (NZD) Firm in Spite of Lower Manufacturing PMI
The New Zealand Dollar (NZD) remained on a stronger footing against its rivals even as the Business NZ PMI showed a slowdown on the month.
Although the PMI dipped from 63.6 to 58.4 in April, this was not enough to put pressure on the ‘Kiwi’. As this reading still demonstrates that the manufacturing sector experienced solid growth at the start of the second quarter, this encouraged sustained confidence in the economic outlook.
If the corresponding services PMI also impresses, NZD exchange rates could remain biased to the upside this morning.
Data Releases
08:30 NZD Services PMI (Apr) 53
22:15 CAD Housing Starts (Apr) 290,000
22:30 USD New York Empire State Manufacturing Index (May) 22.55