A mixed morning for the Kiwi and Aussie Dollar shifts focus to the BoJ and BoE who deliver policy decisions, though neither are likely to deliver a shock.
Economic data released through the Asian session this morning included 3rd quarter GDP numbers and November trade data out of New Zealand and November employment figures out of Australia. Outside of the stats, the BoJ monetary policy decision is due out later this morning, with BoJ Governor Kuroda scheduled to speak at the BoJ press conference. Out of China, there could be more updates from the CEWC that could also provide direction through the day.
For the Kiwi Dollar,
The economy grew by 0.3% in the 3rd quarter, the slowest growth rate since Dec-13, according to figures released by NZ Stats, with growth coming up short of a forecasted 0.6% and a 2nd quarter 1.00%,
On the trade data, the annual trade deficit narrowed from NZ$5,790m to NZ$5,420m, according to NZ Stats.
The Kiwi Dollar moved from $0.68044 to $0.67661 upon release of the data, before rising to $0.6777 at the time of writing, a gain of 0.15% for the session.
For the Aussie Dollar, November labour figures were mixed in the early part of the Asian session, according to the ABS,
The Aussie Dollar moved from $0.71104 to $0.71181 upon release of the figures, before rising to $0.7122 at the time of writing, a gain of 0.18% for the session.
Elsewhere, the Japanese Yen, the Japanese Yen stood at ¥112.52, a loss of 0.04% for the session, with the BoJ monetary policy decision not expected to delivery any surprises later in the session, leaving policy divergence in favour of the Dollar.
For the EUR, there are no material stats scheduled for release through the day, leaving the markets to respond to the FOMC economic projections released on Wednesday and the interest rate hike.
On the political front, the final agreement between the Italian coalition government and Brussels will be a positive, though we can expect focus to shift towards the economic outlook and what was essentially a hawkish FED Chair on Wednesday, in spite of fewer rate hikes projected for next year.
At the time of writing, the EUR was up 0.08% to $1.1385, with sentiment towards monetary policy and the economic outlook being the key drivers today.
For the Pound, it’s a big day ahead, with key stats scheduled for release including November retail sales figures that are due out ahead of the BoE’s December monetary policy decision, which will be accompanied by a more influential set of minutes, the BoE unlikely to make a move today, with Brexit uncertainty continuing to linger.
While we can expect the Pound to respond to the minutes and the vote count, in event that there is some descent, any updates on Brexit or chatter from Parliament could overshadow the data and the BoE later today.
At the time of writing, the Pound up 0.10% to $1.2623, with today’s stats, the BoE and chatter from Parliament the key drivers today.
Across the Pond, economic data scheduled for release includes the weekly jobless claims figures and manufacturing numbers out of Philly.
Following a disappointing set of numbers out of NY State earlier in the week, the Dollar could take another hit should the numbers be in line with or worse than forecasted, with the FED’s increased focus on the stats making the Dollar all the more sensitive to the numbers.
At the time of writing, the Dollar Spot Index was down 0.04% to 96.999.
For the Loonie, stats are limited to October wholesale sales figures, which will provide some direction for the Loonie, though it still boils down to sentiment towards BoC policy near-term and the direction of oil prices on the BoC’s outlook, with today’s numbers needing to be particularly strong to nudge the Loonie.
The Loonie was up 0.04% to C$1.3479 against the U.S Dollar at the time of writing.
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.