The Greenback Finds Early Support as Economic Data Tempers Optimism

Earlier in the Day:

It was a busy start to the day on the economic calendar this morning. The Aussie Dollar, Kiwi Dollar, and British Pound were in action.

There were no major spikes from the daily COVID-19 numbers to affect risk sentiment. A lack of any major catalysts and depressed business confidence figures tested the Aussie Dollar and Kiwi Dollar early on.

Looking at the latest coronavirus numbers,

On Monday, the number of new coronavirus cases rose by 102,703 to 7,188,443 On Sunday, the number of new cases had risen by 123,802. The daily increase was lower than Sunday’s rise, while higher than 95,146 new cases from the previous Monday.

Germany, Italy, and Spain reported 783 new cases on Monday, which was up from 610 new cases on Sunday. On the previous Monday, 680 new cases had been reported.

From the U.S, the total number of cases rose by 18,206 to 2,025,655 on Monday. On Sunday, the total number of cases had risen by 20,274. On Monday, 1^st June, a total of 21,287 new cases had been reported.

For the Kiwi Dollar

Business confidence provided the Kiwi Dollar with little support in the early hours.

The ANZ Business Confidence Index increased from -41.8 to -33 in June. In May, the Index had risen from -66.6 to -41.8.

According to the latest ANZ Report,

• A net 29% of firms expect weaker economic activity in their own business, up by 10 points from May.
• Employment intentions fell rose from 42.4% to a net 37.0% of firms intending to reduce employment.
• Investment intentions improved from a negative 31.7% to a negative 21.6%.
• Profit expectations rose from a net 55.6% expecting lower profitability to a net 51.2%.
• Export intentions rose from a negative 32.2 to -17.1.
• The Business Confidence Index increased from -41.8 to -33.

The Kiwi Dollar moved from $0.65627 to $0.65541 upon release of the numbers. At the time of writing, the Kiwi Dollar was down by 0.14% to $0.6551.

For the Aussie Dollar

It was business confidence that garnered attention this morning. The NAB Business Confidence Index rose from -46 to -20 in May. In April, the Index had risen from -66 to -46.

There was no major rebound in confidence as lockdown measures continued to hinder recovery in the services sector.

The Aussie Dollar moved from $0.69988 to $0.70040 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.33% to $0.6998.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.24% to ¥108.17 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. German Trade figures for April are due out along with the Eurozone’s 2^nd estimate GDP numbers for the 1^st quarter.

We do not expect the EUR to find too much direction from the numbers today, as focus now shifts to beyond May.

We will need to get a sense of how member states will agree to distribute funds from the COVID-19 Stimulus package and EU Budget. On the geopolitical risk front, any spike in tensions would be EUR negative.

At the time of writing, the EUR was down by 0.07% to $1.1286.

For the Pound

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

The lack of stats will continue to leave the Pound in the hands of Brexit and market risk sentiment.

Later in the day, BoE MPC Member Cunliffe is scheduled to speak, with any monetary policy chatter likely to influence.

Earlier in the day, retail sales figures for May provided little comfort. The BRC Retail Sales Monitor jumped by 7.9% following a 5.7% rise in April. While the headline number was Pound positive, the devil was in the details, however. Total sales slid by 5.9%. The headline figure provides like-for-like comparisons and doesn’t consider temporarily closed store figures while including online sales.

At the time of writing, the Pound was down by 0.09% to $1.2713.

Across the Pond

It’s also a quiet day ahead on the U.S economic calendar. April’s JOLTs job openings are due out later today.

We don’t expect the stats to have any impact on market risk sentiment and the Dollar, however.

We’ve seen May’s unexpected rise in nonfarm payrolls that will bring the focus onto May’s job openings.

Away from the economic calendar, tensions between the U.S and China continue to linger that could end up pouring cold water on hopes of a speedy global economic recovery. Expect any chatter from Beijing and Washington to garner plenty of attention.

The Dollar Spot Index was up by 0.10% to 96.719 at the time of writing.

For the Loonie

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

That will leave the Loonie in OPEC’s hands, with the OPEC meeting scheduled later today.

At the time of writing, the Loonie was down by 0.07% to C$1.3391 against the U.S Dollar.

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