Australian Dollar (AUD) Climbs as PPI Exceeds Forecasts
The Australian Dollar (AUD) rose against the majority of its peers at the end of last week, as higher-than-expected producer prices further illustrated the need for central bank intervention.
The Q1 PPI jumped to 4.9% on an annualised basis rather than the 4% expected, reflecting price rises for output of building construction, heavy and civil engineering construction and petroleum refining and manufacturing.
Into today, Australian manufacturing data may have some affect on AUD exchange rates, if it prints outside of expectations. Weaker manufacturing could dent ‘Aussie’ sentiment, illustrating persistent supply constraints.
New Zealand Dollar (NZD) Fluctuates on AUD Strength
The New Zealand Dollar (NZD) rose overall on Friday, finding support on upside in its sister currency.
A lack of New Zealand data left the ‘Kiwi’ somewhat exposed, but a more optimistic market mood capped losses alongside positive commodity dynamics.
Looking ahead, a further lack of data leaves NZD to trade on external factors today; if risk sentiment improves, the ‘Kiwi’ may enjoy tailwinds.
Pound (GBP) Corrects Up from Multi-Month Lows
The Pound (GBP) recouped some of its losses at the end of the week, having recently hit record lows against several of its peers.
A technical correction may have caused the uptick, alongside improving market sentiment – risk-off currencies enjoyed bullish tailwinds which were reflected by strong gains in major European equity indexes.
The correction may continue into this week’s session, although a lack of UK data leaves Sterling vulnerable to downside.
Euro (EUR) Pressured by Underwhelming Data Release
The Euro (EUR) succumbed to headwinds on Friday as a clutch of data from Germany and the Euro area printed at or near to expectations.
Given recent miscalculations from the European Central Bank (ECB), today’s flash CPI release underwhelmed markets by printing at the expected rate of 7.5%. Meanwhile, German GDP exceeded forecasts by 0.1%, while Eurozone GDP missed expectations by the same amount.
German retail data, manufacturing PMIs and economic sentiment in the Euro area may influence trading today. The data is expected to reflect a weakening of morale, potentially denting EUR appeal.
US Dollar (USD) Breaks Upward Trend
The US Dollar (USD) fell against several of its peers at the end of last week as the DXY Dollar Index fell south following a six-day rally.
Risk-on headwinds dented ‘Greenback’ prospects alongside a mixed clutch of data; the Federal Reserve’s preferred inflation measure, the PCE index, missed expectations – although personal income and spending data exceeded forecasts.
Today, manufacturing data will be in the spotlight. The S&P and ISM indexes are both predicted to reveal an increase in April’s manufacturing activity, lending USD possible upside.
Canadian Dollar (CAD) Firms as GDP Exceeds Estimates
The Canadian Dollar (CAD) strengthened overall on Friday as crude oil prices rose and Canada’s GDP increased above expectations for the month of February.
The ‘Loonie’ may relinquish some gains today, however, if April’s manufacturing PMI reports a slowdown in activity, as expected.
Data Releases
May 2nd 08:30 AUD Ai Group Manufacturing Index (Apr) 55.4
May 2nd 09:00 AUD S&P Global Manufacturing PI Final (Apr) 57.2
May 2nd 16:00 EUR German Retail Sales (Mar) 0.3%
May 2nd 17:55 EUR German S&P Global Manufacturing PMI Final (Apr) 54.1
May 2nd 18:00 EUR S&P Global Manufacturing PMI Final (Apr) 55.3
May 2nd 19:00 EUR Economic Sentiment (Apr) 108
May 2nd 23:30 CAD S&P Global Manufacturing PMI (Apr) 58
May 2nd 23:45 USD S&P Global Manufacturing PMI Final (Apr) 59.7
May 3rd 00:00 USD ISM Manufacturing PMI (Apr) 57.8