Advertisement
Advertisement

Economic Data Puts the GBP, USD and Loonie in the Spotlight, with the FOMC Minutes also in Focus

By:
Bob Mason
Published: Feb 19, 2020, 01:27 UTC

It's a busy day ahead, with inflation figures out of Canada, the UK, and the U.S, and the FOMC Meeting Minutes in focus...

Light Board

Earlier in the Day:

It was a busier day on the Asian economic calendar this morning. The Japanese Yen and Aussie Dollar were in action through the early part of the day.

Out of Japan, January trade figures were in focus ahead of 4th quarter wage growth numbers out of Australia.

For the Japanese Yen

Japan’s trade deficit widened from ¥154.6bn to ¥1,312.6bn in January. Economists had forecast a widening to ¥1,684.9bn.

According to figures released by the  Ministry of Finance,

  • Exports fell by 2.6%, following a 6.3% slide in December. Economists had forecast a 6.9% fall.
    • Exports to China fell by 6.4% and by 12.1% to Korea.
    • There were also notable declines in exports to the U.S (-7.7%) and to Germany (-5.4%).
    • Exports to the UK surged by 20.3% to make the Western European numbers more palatable.
  • Imports fell by 3.6% in January, following a 4.9% slide in December. Economists had forecast a 1.3% decline.
    • Imports from China and HK fell by 5.7% and by 42.4% respectively.
    • From the U.S, imports fell by 11.5% and by 9.1% from Germany.

The Japanese Yen moved from ¥109.894 to ¥109.943 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.04% to ¥109.91 against the U.S Dollar

For the Aussie Dollar

Wages grew by 0.5% in the 4th quarter, following a 0.5% increase in the 3rd quarter. In the 2nd quarter, wage growth had risen by 0.6%. Economists had forecast a 0.5% rise.

According to the ABS,

  • In the quarter, private sector wages grew by 0.5%, while public sector wages increased by 0.4%.
  • Annually, both private and public sector wages rose by 2.2%. This was the lowest public sector growth rate since records began back in the 4th quarter of 1997.

The Aussie Dollar moved from $0.66911 to $0.66916 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.07% to $0.6691.

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.19% to $0.6398.

The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction.

A lack of stats will likely leave the EUR under pressure ahead of German consumer confidence figures and private sector PMI numbers due out later in the week.

Barring fiscal support from the likes of the German and French governments, the onus will remain on the ECB to provide support. ECB President Lagarde may be a little unwilling, particularly with a number of finance ministers up in arms over ECB monetary policy.

At the time of writing, the EUR was up by 0.06% at $1.0799.

For the Pound

It’s a relatively busy day ahead on the economic calendar. Key stats include January inflation figures due out later this morning.

Barring a marked pickup in inflationary pressures, the stats will likely have less of an impact ahead of tomorrow’s retail sales figures.

Outside of the numbers, sentiment towards trade negotiations will likely limit any material breakout from current levels.

At the time of writing, the Pound was up by 0.02% to $1.3001.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. Key stats include wholesale inflation and housing sector numbers for January.

While wholesale inflation figures will have the greatest impact, expect housing sector numbers to also provide direction.

Building permits and housing start numbers due out later today should continue to paint a positive outlook for the sector.

Labor market conditions and low mortgage rates continue to provide support.

On the monetary policy front, the FOMC monetary policy meeting minutes are due out later in the day.

While FED Chair Powell talked of a resilient U.S economy, it remains to be seen whether other Committee members share a similar view.

Ultimately, however, economic indicators from the U.S have supported Powell’s and the FED’s outlook on growth until now.

At the time of writing, the Dollar Spot Index was down by 0.02% to  99.420.

For the Loonie

It’s a relatively busy day ahead on the economic calendar, with January inflation figures due out of Canada.

Expect plenty of sensitivity to today’s numbers, though expect market risk sentiment and impact on crude oil prices to also influence.

The Loonie was up by 0.05% at C$1.3253 against the U.S Dollar, at the time of writing.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

Did you find this article useful?

Advertisement