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Bob Mason
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Background of different currencies

Earlier in the Day:

It was a busier start to the day on the economic calendar this morning. The Kiwi Dollar, the Aussie Dollar, and the Japanese Yen were in action this morning. There was also economic data from China in focus.

For the Japanese Yen

Industrial production fell by 2.1% in February, partially reversing a 4.3% rise in January. Economists had forecast for a 1.2% decline.

According to the Ministry of Economy, Trade and Industry,

  • Industries that mainly contributed to the decrease were:
    • Motor vehicles.
    • Electric machinery, and information, and communication electronics equipment.
    • Chemicals (excl. inorganic, organic chemicals and medicine).
  • Industries that mainly contributed to the increase were:
    • Production machinery.
    • Transport equipment (excl. motor vehicles).
    • Electronic parts and devices.
  • Forecasts are for production in March 2021 to fall by 1.9%. This was up from a forecasted 6.1% slide.
  • Production is projected to jump by 9.3% in April 2021.

The Japanese Yen moved from ¥110.329 to ¥110.328 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.20% to ¥110.58 against the U.S Dollar.

For the Kiwi Dollar

Business confidence was in focus early this morning.

In March, the ANZ Business Confidence Index declined from 7.0 to 0.0.

According to the latest ANZ Report,

  • While business confidence fell by 7 points to be flat, some details were stronger for March.
    • Employment intentions increased by 5 points, with capacity utilization up 2 points.
    • Investment intentions remained little changed, however.
    • Expected costs rose 2 points to a net 74% expecting higher costs ahead.
    • Inflation expectations picked up from 1.76% to 1.95%.
  • There were also some negatives, however.
    • Profit expectations fell from 1.3 to 0.5, with ease of credit falling from -31.0 to -38.8.
    • Activity vs same month one year ago was down marginally from 9.2 to 7.6.
    • Employment vs same month one year ago was also weaker, albeit modestly.

The Kiwi Dollar moved from $0.69912 to $0.69899 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.11% to $0.6989.

For the Aussie Dollar

Private sector credit figures drew attention this morning.

Private sector credit increased by in February. In January, total private sector credit had risen by 0.2%.

According to the RBA,

  • Personal credit fell by 0.5%.  In January, personal credit had fallen by 0.8%.
  • Business credit stalled after having fallen by 0.1% in January.
  • Housing credit rose by a further 0.4%. In January, housing credit had also risen by 0.4%.
  • Year-on-year, total credit rose by 1.6%. In February 2020, total credit had risen by 2.7%.
  • A 12.3% slide in personal credit was a drag on the headline figure.

Building approvals impressed, surging by 21.6% in February.  In January approvals had tumbled by 19.4%.

The Aussie Dollar moved from $0.76104 to $0.76116 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.18% to $0.7611.

From China

NBS Private sector PMI figures for March were in focus this morning.

The NBS Manufacturing PMI increased from 50.6 to 51.9. Service sector activity also picked up in March. The services PMI rose from 51.4 to 56.3.

The Aussie Dollar moved from $0.76088 to $0.76123 upon release of the figures.

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The Day Ahead:

For the EUR

It’s a busier day ahead on the economic calendar. French consumer spending and German unemployment figures are due out in the early part of the European session.

With parts of France reentering lockdown, we would expect the consumer spending figures to have a limited impact on the EUR.

Later in the day, prelim inflation figures for France, the Eurozone, and Italy are also due out.

With sensitivity over inflation lingering, the Eurozone numbers will influence.

Away from the economic calendar, COVID-19 news updates from the Eurozone will remain an area of focus.

At the time of writing, the EUR was flat at $1.1717.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. Finalized 4th quarter GDP numbers area due out of the UK. Barring a marked downward revision, however, we don’t expect the numbers to have a material impact on the Pound.

Government plans to ease lockdown measures and news updates on vaccinations remain key near-term.

At the time of writing, the Pound was down by 0.03% to $1.3736.

Across the Pond

It’s a busier day ahead on the economic calendar. ADP employment change figures are due out along with Chicago PMI numbers for March.

Expect the ADP numbers to have a greater impact on the day. The markets are looking for a continued improvement in labor market conditions.

Pending home sales figures for February are also due out but would likely have a muted impact on the Dollar.

Away from the economic calendar, geopolitics and chatter from Capitol Hill will remain areas of focus.

At the time of writing, the Dollar Spot Index was down by 0.02% to 93.277.

For the Loonie

It’s a busier day ahead on the economic calendar. January GDP and February RMPI numbers are due out late in the session.

Expect both sets of numbers to influence.

Also, in focus will be crude oil inventory numbers from the U.S.

At the time of writing, the Loonie was up by 0.13% to C$1.2617 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

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