Economic Data and Central Bank Commentary Keep the EUR and Greenback in Focus

Earlier in the Day:

It was a relatively busy start to the day on the economic calendar this morning. The Japanese Yen and the Aussie Dollar were in focus this morning, with the RBNZ also in action.

For the Japanese Yen

Core machinery orders were in focus this morning.

In February, core machinery orders slid by 8.5% month-on-month, following a 4.5% decline in January. Year-on-year, orders were down by 7.1%. In January, core machinery orders had been up by 1.5%.

Economists had forecast core machinery orders to increase by 2.8% in the month and to rise by 2.3% year-on-year.

The Japanese Yen moved from ¥108.927 to ¥108.861 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.18% to ¥108.86 against the U.S Dollar.

For the Kiwi Dollar

While there were no material stats to consider, the RBNZ delivered its April monetary policy decision this morning.

In line with market expectations, the RBNZ left the cash rate unchanged at 0.25%.

Salient points from the RBNZ Rate Statement included:

• The global growth outlook has improved, though the recover in growth is uneven across countries.
• COVID-19 mutations continue to provide uncertainty over the economic outlook.
• Economic activity in NZ slowed over the summer before a rebound in domestic activity.
• December quarter GDP was weaker than expected and more recent indicators suggest that momentum has reduced.
• Members noted that supply chain disruptions could constrain economic domestic economic activity near-term.
• Business credit growth and investment also remains subdued.
• New government housing policies will likely dampen house price growth. It may take time, however, to see any implications on price inflation and employment.
• Near-term price increases are likely and these will see headline inflation exceed 2% for a period. Price increases are likely to be temporary, however.
• Employment is below its maximum sustainable level and expect employment to increase gradually.
• Overall risks to the economic outlook remain balanced, supported by ongoing stimulatory fiscal and monetary policies.
• The Committee agreed to maintain its current stimulatory monetary settings until it is confident that consumer price inflation will be sustained at the 2% per annum target midpoint, and that employment is at or above its maximum sustainable level.
• A prolonged period of time is expected to pass before these conditions are met.
• The Committee agreed that it was prepared to lower the Official Cash Rate if required.

The Kiwi Dollar moved from $0.70580 to $0.70556 in response to the rate statement. At the time of writing, the Kiwi Dollar up by 0.14% to $0.7063.

For the Aussie Dollar

Consumer confidence was in focus following business confidence figures on Tuesday.

In April, the Westpac Consumer Confidence Index rose by 6.2% to 118.8, its highest level since Aug-2010. In March, the index had risen by 2.6% to 111.8.

According to the latest Westpac Report,

• Family finances vs a year ago jumped by 13.4% to 103.5, with family finances next 12-months up by 5.4% to 117.6.
• Economic conditions next 12-months increased by 10.3% to 125.5, with conditions next 5-years up by 4.1% to 123.8.
• Significantly, the economic conditions next 12-months was up 133.8% year-on-year.
• The Unemployment Expectations Index rose by 5.6% to 118.4, however, with time to buy a dwelling falling by 7.9%.
• Time to buy a major household item slipped by 0.2% in the month, while up 61.9% year-on-year.

The Aussie Dollar moved from $0.76455 to $0.76445 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.08% to $0.7647.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Industrial production figures for the Eurozone are due out along with finalized inflation figures for Spain.

Expect February industrial production figures to have a greater influence on the EUR.

On the monetary policy front, ECB President Lagarde could also move the dial in a scheduled speech later in the day.

At the time of writing, the EUR was up by 0.09% to $1.1959.

For the Pound

It’s a quieter day ahead on the economic calendar.

4^th quarter labor productivity figures are due out later today. With the UK government easing COVID-19 restrictions, however, we don’t expect the numbers to have an impact.

Away from the economic calendar, expect COVID-19 news to influence, however.

At the time of writing, the Pound was up by 0.07 to $1.3759.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. Import and export price index figures are due out later today. We don’t expect too much influence from the numbers.

Any FOMC member commentary and chatter from Capitol Hill will need monitoring, however.

FED Chair Powell is due to speak and will garner plenty of interest late in the day.

At the time of writing, the Dollar Spot Index was down by 0.07% to 91.789.

For the Loonie

It’s a quiet day ahead on the economic calendar. There are no material stats from Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of crude oil inventory numbers and market risk sentiment on the day.

At the time of writing, the Loonie was down by 0.06% to C$1.2542 against the U.S Dollar.

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