AUDUSD (0.775): The Australian Dollar saw a strong rally after briefly dipping to weekly lows near 0.76668 to post a fresh two week high above 0.782. However the currency failed to hold on to its gains as it eased back lower. Most of the gains in the Aussie were largely due to the weakness in the Greenback. Economic data from Australia was limited with only the RBA meeting minutes released earlier in the week. With no major shifts to the tone and with the RBA signaling a period of stability, the Aussie was well supported.
- RBA monetary policy meeting minutes released
- Australia new motor vehicle sales m/m -1.3% vs. -1.5% previously
- MI leading index m/m -0.1% vs. 0.0% previously
EURUSD (1.131): The Euro was more susceptible to Greece developments and the ensuing rumors and counter rumors. Fundamentally, economic data was in line with expectations as CPI, both on the month and the year managed to match estimates, while economic sentiment was relatively lower than expected. Greece crisis is expected to see a possible resolution over the weekend. So far, the ECB has agreed to increase the ELA to Greek Central Banks. The Euro was however relatively stronger this week as the single currency attempted to post a new high near 1.144 but eased from these levels as the Eurozone failed to reach a resolution by Thursday’s deadline.
- Eurozone trade balance 24.3bn vs. 20.3bn
- German Final CPI m/m 0.1% vs. 0.1%
- Eurozone Final CPI y/y 0.3% vs. 0.3%; Core CPI y/y 0.9% vs. 0.9%
- German ZEW Economic sentiment 31.5 vs. 37.5
- Eurozone ZEW Economic sentiment 53.7 vs. 60.3
- ECB TLTRO 73.8bn vs. 60bn
- German PPI m/m 0.0% vs. 0.2%
NZDUSD (0.689): The Kiwi continued to be a preferred short as the currency plummeted to lows, last seen in 2010. The only major economic data from New Zealand was the quarterly GDP which saw a sloppy growth of 0.2% for the quarter, missing estimates of 0.6%. The slowdown in the quarterly GDP is expected to see more rate cuts from the RBNZ at its future meetings, keeping the pressure on the currency. Despite the selloff in the US Dollar, the Kiwi could not manage to retrace any of its gains, turning out to be the weakest currency this week.
- Global Dairy Trade Index -1.3% vs. -4.3%
- Current Account 0.66bn vs. 0.27bn
- GDP q/q 0.2% vs. 0.6%
USDJPY (123.02): The Japanese Yen was largely muted this week on lack of any clear data. The BoJ left its monetary policy unchanged and over the week, various officials including the Japanese finance ministry attempted to talk down the comments from BoJ’s Kuroda made a week earlier on the Yen’s exchange rate depreciation which saw the Yen strengthen by close to 200 pips. USDJPY remains susceptible to economic flows from the US Dollar more than anything else. The currency is trading within the weekly range of 124.415 and 122.5.
- Trade balance -0.18trn vs. -0.17trn
- All industries activity m/m 0.1% vs. 0.3%
- BoJ monetary policy
USDCAD (1.228): The Canadian Dollar was relatively stronger this week boosted by stable Oil prices and a weaker Greenback. Economic data was mixed this week with manufacturing sales falling -2.1% for the month but wholesale sales saw a modest gain of 1.9%. Consumer inflation was also positive this month with the headline CPI rising 0.4% and Core CPI rising 0.6%. Retail sales failed to meet estimates showing a decline of -0.1% on headline and -0.6% on the core. USDCAD was more volatile this week as the currency declined from weekly highs near 1.235 to post lows of 1.2146 before stabilizing near 1.228.
- Manufacturing sales m/m -2.1% vs. -1.3%
- Wholesale sales m/m 1.9% vs. 0.3%
- Core CPI m/m 0.4% vs. 0.3% CPI m/m 0.6%vs. 0.4%
- Retail sales m/m -0.1% vs. 0.7%; Core retail sales m/m -0.6% vs. 0.3%
GBPUSD (1.524): The Pound Sterling saw a strong uptrend as the currency rallied to post 8 month highs near 1.586. Consumer inflation in the UK was mostly stable posting positive numbers of 0.1% on the headline and 0.9% on the core on the y/y basis. Unemployment continued to improve with the average earnings index rising 2.7%, beating estimates of 2.5%. The UK unemployment rate stood at 5.5%, unchanged. Retail sales for the month also saw a modestly stronger print of 0.2%, beating estimates for a flat reading.
- CPI y/y 0.1% vs. 0.1%; Core CPI y/y 0.9% vs. 1.0%
- PPI Input m/m -0.9% vs. 0.7%
- RPI y/y 1.0% vs. 1.1%
- Average earnings index 3m/y 2.7% vs. 2.5%; unemployment rate 5.5% unchanged
- BoE meeting minutes released
- Retail sales m/m 0.2% vs. 0.0%
USDCHF (0.923):The SNB left its LIBOR rate unchanged at -0.75% and the press conference did not offer much for traders. SNB Chief, Thomas Jordan stuck to the usual narrative of calling the Swiss Franc overvalued, but the comments did not help much as the CHF continued to be well bought across the board. Against the Greenback, the Swiss Franc broke below last week’s low of 0.9264 to post fresh lows to 0.9167 before stabilizing higher.
- PPI m/m -0.8% vs. 0.1%
- Retail sales y/y 1.6% vs. -2.2%
- ZEW Economic expectations 0.1 vs. -0.1 previously
- Trade balance 3.43bn vs. 2.72bn
- SNB Libor rate -0.75% unchanged
US Dollar Index (94.5): The US Dollar Index was weaker as the markets focused on the FOMC’s SEP economic projections, primarily looking into the downward revisions on the GDP and an upwardly revised unemployment rate projection. However, rate hikes in 2015 is still on the cards and as per the SEP, the Fed could be looking to hike rates twice this year at 25bps per hike. The Greenback sold off to post a fresh weekly low below 93.5 but the Buck managed to stabilize near the lows to trade back higher near 94.5 at the time of writing. Economic data from the US was largely mixed as housing data continues to improve. Consumer inflation was however modest rising 0.4% and 0.1% on the headline and core, below estimates.
- Empire State manufacturing index -2. vs. 5.8
- Industrial production m/m -0.2% vs. 0.2%
- Building permits 1.28mn vs. 1.11mn
- Housing starts 1.04mn vs. 1.1mn
- FOMC statement and press conference
- CPI m/m 0.4% vs. 0.5%; Core CPI m/m 0.1% vs. 0.2%
- Weekly unemployment claims 267k vs. 278k
- Philly Fed manufacturing Index 15.2 vs. 8.1
- CB leading index m/m 0.7% vs. 0.4%
