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U.S Inflation and the BoC Put the Greenback and Loonie in Focus

By:
Bob Mason
Published: Mar 10, 2021, 01:37 UTC

It's a relatively quiet day on the economic calendar. The BoC is in action later today, however, with U.S inflation figures likely to also garner plenty of interest.

Map of Canada on money bill

In this article:

Earlier in the Day:

It’s was another busy start to the day on the economic calendar this morning. The Aussie Dollar and Kiwi Dollar were in action early this morning. There was also economic data from China to consider.

For the Kiwi Dollar

Retail sales figures were in focus early this morning.

In February, electronic card retail sales slid by 2.5%, month-on-month, following an upwardly revised 0.3% decline from January.

According to NZ Stats,

  • 7-days of restrictions from 14th February led to the pullback in spending levels.
  • Spending on non-retail industrials, including postal services, travel agencies, and medical services slid by 5.9%.
  • There was also a 0.8% decline on spending on consumable goods. This included supermarket, specialized food, and liquor sales.
  • Between February 2020 and February 2021, electronic card spending was down 8.1%.
  • The hospitality sector was the worst hit, with spending sliding by 15.8%. Spending on accommodation slumped by 42.6% over the period.

The Kiwi Dollar moved from $0.71734 to $0.71689 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.01% to $0.7166.

For the Aussie Dollar

Consumer sentiment was in focus following yesterday’s business confidence figures.

In March, the Westpac Consumer Sentiment Index rose by 2.6% to 111.8, following a 1.9% increase in February.

According to the latest Westpac Report,

  • The index was just 0.2 points below December’s 10-year high.
  • Improving economic conditions and prospects domestically and abroad drove the index higher.

Looking at the sub-Indexes

  • Economic Conditions next 12-months rose by 3.7% to 113.8, which was up 46.1% over 12-months.
  • Time to buy a major household item rose by 3.7% to 123.7.
  • Family finances vs a year ago increased by 2.8% to 91.3, while family finances next 12-months rose by a modest 0.2%.
  • Economic conditions next 5-years rose by 2.3%, with the Unemployment Expectations Index falling by 2.1%.

The Aussie Dollar moved from $0.77161 to $0.77177 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.09% to $0.7707.

From China

Consumer prices rose by 0.6% in February, month-on-month, following a 1.0% increase in January. Economists had forecast a 0.4% rise.

Year-on-year, consumer prices were down by 0.2%. In January, consumer prices had been down by 0.3% year-on-year.

Wholesale inflationary pressures picked up in February, with the Producer Price Index rising by 1.7% year-on-year. In January, the PPI had risen by 0.3%. Economists had forecast a 1.5% rise.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.13% to ¥108.62 against the U.S Dollar.

The Day Ahead:

For the EUR

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

The lack of stats will leave the EUR in the hands of market risk sentiment on the day as the markets look ahead to tomorrow’s ECB policy decision.

At the time of writing, the EUR was down by 0.06% to $1.1894.

For the Pound

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

While market risk sentiment will continue to influence, support from an easing of COVID-19 containment measures should continue to limit the downside.

At the time of writing, the Pound was down by 0.08% to $1.3881.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. Inflation figures for February are due out later today.

With market sensitivity to reinflation persisting, expect plenty of influence from today’s figures.

At the time of writing, the Dollar Spot Index was up by 0.07% to 92.019.

For the Loonie

There are no material stats to provide the Loonie with direction. While there are no material stats, the Bank of Canada delivers its March monetary policy decision later today.

While no interest rate cut is anticipated, forward guidance will be key, putting a greater emphasis on the Rate Statement.

At the time of writing, the Loonie was down by 0.07% to C$1.2647 against the U.S Dollar.

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

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.

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