FX News
Australia (AUD)
The Australian Dollar gained ground Wednesday extending its run from the 9 Feb low 0.7760 during another massive NY session. US CPI and Retail Sales the highlights, CPI Printing better than expected at 2.1% and Retail Sales worse. The markets went nuts as a result buying AUD to 0.7930 where it levelled out Thursday. Key Australian unemployment numbers yesterday have shown the Australian economy is robust as the unemployment rate remains the same at 5.5%. There was little impact on the AUD from the data. Next week we have a light week with data –only Monday’s Monetary Policy Minutes of note.
New Zealand (NZD)
As expected the New Zealand Dollar maintained support above the crucial 0.7200 support level outperforming its rivals in a market of large movements. Tuesday’s NZD inflation expectation kick started the NZD with markets reacting to the RBNZ’s latest survey which showed a number of businesses showed support for inflation numbers rising over the coming years close to 2% in 2018 and rising again in 2019. US CPI numbers gave the kiwi a further notable bounce pushing it initially to 0.7250 before travelling to a February high of 0.7370 before levelling off. The Business Manufacturing Index printed Friday at 55.6, with the last 62 odd months indicating expansion the result was well expected and reflects the current economic positivity.
United States (USD)
Friday morning turned out to be dramatic for the US Dollar with mixed data released pushing the greenback to all corners. US inflation surprised the markets to the upside surpassing expectations of 1.9% to print at 2.1% and 0.5% for the month- well above the 0.3% expected. This confirmed fears of an expected faster increase in rate hikes triggered by the recent non-farm payroll report. This caused the Dollar to trade significantly higher against its counterparts before retail sales published bringing about a chunky selloff. The US Dollar index soared to 90 then back to 89.10 during volatile trading through the NY session. The 10 year yield has traded to 2.91% its highest level since January 2014, a move above 3.05% will see the highest level since 2011, the higher this number the better the economic outlook.
United Kingdom (GBP)
The British Pound continued its support run off Friday’s low of 1.3770 early week through Thursday pushing to 1.4000 the figure as the US Dollar was sold off and investors sought the Pound. US Retail Sales published weaker, the catalyst for a GBP early Feb reversal along with stronger equity prices and yields. CPI data earlier at 3.0% also helped push the Pound higher, May rate hike almost certainly on the cards now. Fridays m/m Retail figures should offer for further assistance with the next target the to the pre- February high of 1.4070
Europe (EUR)
The EUR plunged sharply overnight Wednesday losing recent gains trading down towards 1.2300 levels on news of better than expected US yearly Inflation numbers. Retail sales figures released soon after and were considerably worse than expected sending the EUR back through the previous weekly high of 1.2400 to 1.2460. German monthly CPI and quarterly GDP was also released Wednesday showing no surprises which should assist the Euro medium term.
Japan (JPY)
The Japanese Yen saw large movement overnight Wednesday especially during the NY session as it traded below 108.00 with JPY buyers a plenty driving down price in a volatile US led decline. The US Dollar tried to recover but was met with stern corrections through 106.60 the low. Long term support has been broken to the downside at 107.30 the next line of defense for USD/JPY is 100.00. No further local news this week could see JPY strengthen further against the US Dollar if Saturday morning US Building permits prints down on expectation.
Canada (CAD)
The Canadian dollar made ground against the greenback Thursday as the US Dollar was sold off in a heated NY session on worse than expected US Retail Figures. The Canadian Dollar traded all the way to 1.2480 where it level off midday Thursday before recovering slightly to 1.2500. later in the week sees Canadian Employment data and Manufacturing figures. Expect the Loonie to be trading back at 1.26 with USD support over the coming week