AUDUSD (0.72): The Aussie dollar continued its steady uptrend since last week testing the highs of 0.7265 at the time of writing. While the RBA’s meeting minutes were seen to be initially dovish for the Aussie on account of the minutes showing the RBA was open to keeping monetary policy accommodative, the market sentiment shifted considerably in the backdrop of the US Federal Reserve leaving interest rates unchanged.
- RBA releases monetary policy meeting minutes
- new motor vehicle sales m/m -1.6% vs. -1.6% previously
- MI leading index m/m -0.3% vs. 0.1%
EURUSD (1.14): The Euro is back to the 1.14 handle led by the weaker US Dollar. Data from Europe was largely mixed as the Eurozone economic sentiment fell to 33.1 below estimates of 42.1 while the annualized CPI came in softly below estimates at 0.1% on the headline and 0.9% on the core. The quarterly employment change however picked up to 0.3%. EURUSD tested the highs of 1.14590 before easing back off the highs by mid day Friday..
- Industrial production m/m 0.6% vs. 0.3%
- French CPI m/m 0.3% vs. 0.4%
- German ZEW Economic sentiment 12.1 vs. 18.3
- Eurozone ZEW Economic sentiment 33.3 vs. 42.1
- Eurozone quarterly employment change 0.3% vs. 0.1%
- Eurozone trade balance 22.4bn vs. 21.4bn
- Eurozone final CPI y/y 0.1% vs. 0.2%; Core CPI y/y 0.9% vs. 1.0%
NZDUSD (0.66): There were some modest improvements from New Zealand this week as the Global dairy price index continued to rise, this week up16.5% from 10.9% previously. On the quarterly GDP although missing estimates by a soft margin, rising only 0.4%, it was better than the previous quarter. The Kiwi got a boost however on a risk off sentiment as the US Dollar weakened on Thursday. The Kiwi was trading at 0.6447 at the time of writing, posting a three week high.
- GDT Price Index 16.5% vs. 10.9% previously
- Current Account -1.22bn vs. -1.4Bn
- GDP q/q 0.4% vs. 0.5%
USDJPY (120.6): The Yen was stronger this week as the Bank of Japan left interest rates unchanged. The BoJ kept up its narrative that the BoJ’s inflation target of 2% would be achieved. USDJPY attempted to test the weekly highs near 120.994 but gave up the gains to settle down -0.90% lower for the week.
- Revised industrial production m/m -0.8% vs. -0.6%
- Tertiary industry activity m/m 0.2% vs. 0.2%
- BoJ leaves monetary policy unchanged
USDCAD (1.3): The USDCAD was mostly unchanged this week but the Canadian dollar gained strength into the FOMC meeting as the US Dollar saw a sharp selloff. Losses were further offset by the CPI data from Canada which came in line with expectations, which saw the Canadian dollar strengthen strongly against the Greenback. USDCAD was down -1.63% for the week.
- Manufacturing sales 1.7% vs. 1.1%
- Foreign securities purchases -10.12bn vs. 5.50bn
- Core CPI m/m 0.2% vs. 0.2%; CPI m/m 0.0% vs. 0.0%
GBPUSD (1.56): The GBPUSD is set to reclaim the previous highs of 1.5685 as the currency surged on a largely positive news from the UK and boosted by the weaker Greenback. Data from the UK this week showed the UK unemployment rate fall to 5.5% unexpectedly while the average earnings index grew 2.9%. Despite the initial setback of a weak inflation reading, the British Pound surged across the board, ignoring the retail sales data which barely managed to meet the estimates growing at 0.2% for the month.
- CPI y/y 0.0% vs. 0.00%; core CPI y/y 1.0% vs. 1.0%
- PPI Input m/m -2.4% vs. -2.3%; PPI Output m/m -0.4% vs. -0.2%
- Average earnings index 2.9% vs. 2.5%
- Unemployment rate 5.5% vs. 5.6%
- Retail sales m/m 0.2% vs. 0.2%
USDCHF (0.95): Data from Switzerland this week saw the producer price index fall -0.7%, below estimates of -0.4% while retail sales showed a modest decline of -0.1% against estimates of 1.5%. The Swiss National Bank left the Libor rate unchanged at -0.75%. In the press conference, SNB Chief, Thomas Jordan noted that the Swiss Franc remained significantly overvalued despite seeing some modest depreciation. On global economic recovery, the SNB expects the moderate pace of recovery to continue. The lack of any further dovish tone from the SNB saw the Swiss Franc gain during the day and managed to keep a strong front against a weak US Dollar. USDCHF was down nearly -1.25% at the time of writing.
- PPI m/m -0.7% vs. -0.4%
- Retail sales y/y -0.1% vs. 1.5%
- ZEW Economic expectations 9.7 vs. 5.9 previously
- SNB leaves Libor rate unchanged -0.75% vs. -0.75%
US Dollar Index (94.5): The US Dollar Index is down -0.79% at the time of writing. This week saw a rather disappointing set of data for the US. Retail sales rose less than expected, while the empire state and the Philly fed manufacturing index both fell below estimates. Inflation data released this week continued to show the downside pressures. The much anticipated Fed meeting saw the FOMC keeping rates unchanged which led to the US dollar weakening across the board. The Dollar Index is trading at 94.45 with the near term resistance at 95..
- Core retail sales m/m 0.1% vs. 0.2%; retail sales 0.2% vs. 0.3%
- Empire state manufacturing index -14.7 vs. -0.5
- Capacity utilization rate 77.6% vs. 77.9%
- Industrial production m/m -0.4% vs. -0.1%
- Business inventories m/m 0.1% vs. -0.2%
- CPI m/m -0.1% vs. 0.0%; Core CPI m/m 0.1% vs. 0.1%
- US building permits 1.17mn vs. 1.15mn
- Weekly unemployment claims 264k vs. 276k
- Housing starts 1.13mn vs. 1.16mn
- Philly Fed manufacturing index -6.0 vs. 6.1
- FOMC fed funds rate < 0.25%, unchanged