Australian Dollar (AUD) Climbs on Strong GDP Data
The Australian Dollar (AUD) climbed against the majority of its peers yesterday as impressive GDP data follows a higher-than-expected PMI reading.
Australia’s Markit manufacturing PMI printed just above expectations at 52, and was followed by GDP statistics reporting growth of 0.7%, as opposed to the 0.5% forecast. Household consumption continued to grow driven by spending on services.
Looking ahead, today’s balance of trade could lend further support to the ‘Aussie’, as economists forecast Australia will record another surplus exceeding AU$10bn.
Pound (GBP) Lifts on Upbeat PMI
The Pound (GBP) managed to find support yesterday following a stronger-than-expected manufacturing PMI (final). August’s data printed at 60.3 as opposed to 60.1, signalling a solid rise in new businesses and export orders.
Pound gains may have been capped, however, by recent coronavirus and Brexit concerns. The UK’s Covid-19 daily case count has risen by 32,181 with virus-led deaths rising by 50, as former DUP leader Arlene Foster criticises the handling of the Northern Ireland Protocol.
Tomorrow’s services PMI may support the Pound if it prints at or exceeds expectations – in the meantime, GBP movement is likely to be directed by risk sentiment and Covid-19 developments.
Euro (EUR) Rangebound on Mixed Stimuli
The Euro (EUR) is trading down against several of its peers as poor data inflicts headwinds.
Yesterday morning’s German retail sales fell by more than was expected, while the Euro area’s manufacturing PMI missed expectations by a whisker. July’s Euro area unemployment rate met expectations: it is the lowest reading since May last year, the number of unemployed people falling from 430K to 14.613 million.
Tomorrow’s services PMIs for Germany and the Euro area may support the Euro, although any strength in the US Dollar will put pressure upon the currency.
US Dollar (USD) Muted by Employment Data
Since shaking off the weakness imposed by Federal Reserve Chairman Jerome Powell last week, the US Dollar (USD) is facing fresh headwinds from lower-than-expected employment figures.
New hires were expected to reach 613K, but instead printed at 374K, far below predictions. An ADP chief economist confirmed that the US private businesses are still 7 million jobs short of pre-Covid levels.
Looking ahead, the US Dollar could mount a recovery later tonight if the US reports that new jobless claims fell to a new post-pandemic low last week.
Canadian Dollar (CAD) Rangebound as Strong Data Stifled by Lowering Oil Prices
The Canadian Dollar (CAD) benefitted from a strong manufacturing PMI yesterday – although gains were subsequently capped by oil price dynamics. WTI crude dived to one-week lows as the OPEC Joint Ministerial Monitoring Committee (JMMC) meet to discuss oil production.
New Zealand Dollar (NZD) (goes up/down) on (event/stimulus)
The New Zealand Dollar (NZD) made some modest gains yesterday, buoyed by the strength of AUD and high risk attitude. With USD muted, risk-on currencies such as NZD enjoy subsequent tailwinds.
Data Releases
Sep 2nd 11:30 AUD Balance of Trade (Jul) A$10.2B
Sep 2nd 22:30 CAD Balance of Trade (Jul) C$1.4B
Sep 2nd 22:30 USD Balance of Trade (Jul) $-71B
Sep 2nd 22:30 USD Initial Jobless Claims (Aug) 345K