The Kiwi Dollar is on the move early as the RBNZ talks up the economy and downplays the likely effects of the coronavirus. Stats and Powell are in focus later.
It was a busy day on the Asian economic calendar this morning. The Kiwi Dollar and the Aussie Dollar were in action in the early part of the day.
Key stats included the electronic credit card retail sales figures out of New Zealand and consumer confidence figures out of Australia,
On the monetary policy front, the RBNZ was also in action, delivering its first monetary policy decision of the year.
Electronic card retail sales fell by 0.1% in January, following on from a 0.9% decline in December. Economists had forecast a 1% rise.
According to NZ Stats,
The Kiwi Dollar moved from $0.64020 to $0.64017 upon release of the figures that preceded the RBNZ policy decision and press conference.
The RBNZ held rates unchanged at 1% this morning, which was in line with expectations. Salient points from the Rate Statement included:
The Kiwi Dollar moved from $0.64118 to $0.64580 upon release of the rate statement and monetary policy statement. At the time of writing, the Kiwi Dollar was up by 0.87% to $0.6462.
Next up is the RBNZ Press Conference…
The Westpac Consumer Sentiment Index jumped by 2.3% to 95.5 in February. In January, the index had fallen by 1.8% to 93.4. Economists had forecast a more modest 1.4% rise.
According to the latest Westpac Report,
The Aussie Dollar moved from $0.67173 to $0.67202 upon release of the stats. At the time of writing, the Aussie Dollar was up by 0.19% to $0.6727.
At the time of writing, the Japanese Yen was down by 0.05% to ¥109.84 against the U.S Dollar.
It’s a relatively quiet day ahead on the economic calendar. Industrial production figures are due out of the Eurozone later today.
Following some particularly disappointing production numbers out of France, Germany, and Italy, today’s figure will need to be particularly dire to move the dial.
Expectations are for production to fall by 1.5% in December, so expect the EUR to soften on any weaker numbers.
Outside of the stats, geopolitical risk is on the rise once more. Tensions return in Italy, with the Irish election result also raising some uncertainty. Things are not much better in Germany, as Merkel’s CDU Party sees Merkel’s chosen successor resign.
Expect chatter from Italy and Germany to garner plenty of attention. The last thing the EU needs is discord as it prepares to negotiate with Britain on trade.
At the time of writing, the EUR was up by 0.02% to $1.0918.
It’s a particularly quiet day ahead on the economic calendar, with no material stats due out of the UK to provide direction.
Economic data from the UK on Tuesday appeared to vindicate MPC members who decided to vote in favor of a hold on interest rates.
The UK managed to avoid an economic contraction, in spite of soft manufacturing and industrial production at the end of the year.
Hopes are that Johnson’s landslide victory will deliver a near-term boost to growth ahead of next month’s budget.
Whether the Pound can hold onto $1.29 levels and eye a return to $1.30 levels remains to be seen, however.
Much will depend on how the government progresses with key trading partners on trade talks.
At the time of writing, the Pound was up by 0.07% to $1.2961.
It’s a quiet day ahead on the data front, with no material stats due out later today to provide the Greenback with direction.
The lack of stats will leave FED Chair Powell and his 2nd day of testimony in focus.
At the time of writing, the Dollar Spot Index was up by 0.04% to 98.765.
It’s a quiet day ahead on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.
Crude oil prices will influence on the day, with OPEC’s monthly report and the weekly IEA numbers due out later today.
The Loonie was up by 0.01% at C$1.3285 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.