The Bank of England and the Pound Take Center Stage Today

Earlier in the Day:

It’s was another relatively busy start to the day on the economic calendar this morning. The Kiwi Dollar and the Aussie Dollar were in action early on.

For the Kiwi Dollar

The New Zealand economy was in focus in the early hours.

In the 4^th quarter, the New Zealand economy contracted by 1%, quarter-on-quarter. Economists had forecasted 0.1% growth. In the 3^rd quarter, the economy had expanded by a downwardly revised 13.9%.

According to NZ Stats,

• At industry level, 7 out of 16 industries declined in the final quarter of 2020.
• Two of the largest contributors to the fall were construction and retail trade & accommodation.
• A lack of international tourists weighed on the retail trade and accommodation sector.
• By contrast, transport, postal, & warehousing and business services delivered the greatest contributions.
• The annual GDP was down by 2.9%, which was the largest ever annual decline.

The Kiwi Dollar moved from $0.72395 to $0.72298 upon release of the figures and minutes. At the time of writing, the Kiwi Dollar was up by 0.10% to $0.7249.

For the Aussie Dollar

Employment figures were in focus this morning.

In February, employment rose by 88.7k, following a 29.1k increase in January. Economists had forecast a more modest 30k rise. Full employment also impressed, rising by 89.1k off the back of a 59.0k increase in January.

The increase led to a fall in the unemployment rate from 6.4% to 5.8%. Economists had forecast a drop to 6.3%.

According to the ABS,

• Hours worked bounced back, rising by 6.1% to reverse a 4.9% slide in January.
• The participation rate held steady at 66.1%.
• In spite of the fall in the unemployment rate to 5.8%, the unemployment rate remained 0.6 percentage points above March 2020.

The Aussie Dollar moved from $0.78163 to $0.78235 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.37% to $0.7827.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.22% to ¥109.08 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day on the economic calendar. 4^th quarter wage growth and January trade figures are due out later this morning.

Expect trade data to have a greater impact on the EUR.

From the ECB, President Lagarde is scheduled to speak after the numbers. The markets will be looking for any updates on the promised ramp up in bond purchases.

At the time of writing, the EUR was down by 0.03% to $1.1975.

For the Pound

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

While there are no material stats to provide direction, the Bank of England is in action later today.

There’s been the talk of negative rates and the UK economy continues to struggle amidst COVID-19 containment measures.

The markets will be looking for any dissent or talk of further easing.

At the time of writing, the Pound was down by 0.07% to $1.3956.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. Philly FED Manufacturing PMI and jobless claim figures are due out later today.

Expect the jobless claim figures to have the greatest impact on the markets.

At the time of writing, the Dollar Spot Index was down by 0.05% to 91.399.

For the Loonie

It’s a relatively busy day on the economic calendar. House price figures and ADP employment change numbers are due out later today.

Expect the ADP employment figures to have the greatest impact on the Loonie.

At the time of writing, the Loonie was up by 0.11% to C$1.2391 against the U.S Dollar.

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