While Economic Data Puts the GBP in Focus, COVID-19 News Updates Will Be Key

Earlier in the Day:

It was a quiet start to the day on the economic calendar this morning. The Kiwi Dollar was in action early this morning. On the monetary policy front, the PBoC also set loan prime rates for the final time this year. While leaving the 5-year unchanged at 4.65%, the PBoC cut the 1-year LPR from 3.85% to 3.80% this morning.

For the Kiwi Dollar

Consumer sentiment waned in the 4^th quarter. The Westpac Consumer Sentiment Index fell from 102.7 to 99.1%.

According to the 4^th quarter survey,

• Rising mortgage rates, as well as ongoing concerns over COVID and its variants weighed.

Looking at the sub-components:

• Compared with the 3^rd quarter, the current financial situation sub-index fell by 7.1 to -10.7 versus an average -8.5.
• The outlook also darkened, with the expected financial situation sub-index falling from 16.1 to 6.9.
• With regards to the economy, the 1-year economic outlook sub-index fell from -5.6 to -11.2.
• The 5-year economic outlook sub-index saw a more modest decline from 11.5 to 10.0.
• Bucking the trend, was a rise in the Good time to buy index from -5.2 to 0.4. This remained well below the 24.4 average, however.

In November, New Zealand’s trade deficit narrowed from NZ$1,302m to NZ$864m. Year-on-year, the deficit widened from NZ$4,900m to NZ$6,040m.

According to NZ Stats,

Compared with November 2020,

• Goods exports rose NZ$668m (13%) to NZ$5.9bn.
  • Milk powder, butter, & cheese rose by NZ$258m (14%).
  • Aluminium and aluminium articles up NZ$141m (151%).
  • Aircraft and parts fell by NZ$113m (89%).
  • Food preperations declined by NZ$82m (36%).
• Goods imports rose NZ$1.8bn (37%) to NZ$6.7bn.
  • Mechanical machinery & equipment up NZ$244m (36%).
  • Vehicles, partes, & accessories rose by NZ$187m (32%).
  • Petroleum & products increased by NZ$150m (53%).
  • Ships, boats, & floating structures up NZ$146m.

The Kiwi Dollar moved from $0.67333 to $0.67448 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.30% to $0.6730.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.04% to ¥113.580 against the U.S Dollar, with the Aussie Dollar down by 0.14% to $0.7115.

The Day Ahead

For the EUR

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

The lack of stats will leave COVID-19 news updates in focus.

At the time of writing, the EUR was flat at $1.1240.

For the Pound

It’s relatively quiet day ahead on the economic calendar. CBI Industrial Trend Orders for December will be in focus this afternoon. With little else for the markets to consider, expect Pound sensitivity.

Away from the economic calendar, COVID-19 news updates will also need continued monitoring.

At the time of writing, the Pound was down by 0.14% to $1.3227.

Across the Pond

It’s a particularly quiet day ahead on the economic calendar. There are no major stats to draw interest, leaving any FOMC member chatter to influence.

At the time of writing, the Dollar Spot Index was up by 0.04% to 96.599.

For the Loonie

It’s also a particular quiet day ahead on the economic data front. There are no material stats due out to provide the Loonie with direction. The lack of stats will leave the Loonie in the hands of crude oil prices and market risk sentiment.

At the time of writing, the Loonie was down by 0.05% to C$1.2895 against the U.S Dollar.

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