With economic data disappointing early in the day, the focus shifts to U.S stats, with GDP numbers and durable goods orders due out...
It was a relatively busy day on the Asian economic calendar this morning. The Kiwi Dollar and Aussie Dollar were in action.
New Zealand’s trade deficit narrowed from NZ$4,460m to NZ$3,870 year-on-year in January. Month-on-month, the trade balance fell from an NZ$384m surplus to an NZ$340m deficit.
According to NZ Stats,
The New Zealand Dollar moved from $0.62898 to $0.62900 upon release of the figures that preceded January business confidence figures.
In January, the ANZ Business Confidence Index fell from -13.2 to -19.4. Economists had forecast a rise to -7.9.
According to the latest ANZ Report,
The Kiwi Dollar moved from $0.62866 to $0.62900 upon release of the numbers. At the time of writing, the Kiwi Dollar down by 0.05% to $0.6290.
Private new capital expenditure slid by 2.8% in the 4th quarter, following on from a revised 0.4% decline in the 3rd quarter. Economists had forecast a 0.4% rise.
According to the ABS,
The Aussie Dollar moved from $0.65511 to $0.65535 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.18% to $0.6556.
While the Aussie Dollar was up in the early hours, the slump in new CAPEX expenditure gives the RBA further reason to cut rates. The low-interest-rate environment was not only meant to support consumers but also fuel business spending.
At the time of writing, the Japanese Yen was up by 0.16% to ¥110.25 against the U.S Dollar.
It’s a relatively busy day ahead on the economic calendar. Key stats include prelim February inflation figures out of Spain and finalized Eurozone consumer confidence figures.
Barring a material pullback in inflation, however, we would expect the numbers to have a muted impact on the EUR.
Expect any revision to Eurozone consumer confidence figures to influence, however, as the markets search for sentiment towards the spread of the coronavirus.
Outside of the numbers, expect market risk sentiment to continue to provide direction. For the EUR, early support kicked in as the markets reacted to news of a rise in new coronavirus cases in the U.S. The upward swing has come as the markets reverse bets on the U.S economy being unscathed from the spread of the virus.
At the time of writing, the EUR was up by 0.26% at $1.0909.
It’s also a quiet day ahead on the economic calendar, with no material stats to provide the Pound with direction.
While there are no stats to consider, the British Government is due to release its terms for trade negotiations with the EU.
It will all come down to how far apart the 2-sides are from the get-go and how the EU responds and Boris Johnson and David Foster react in return.
Expectations are for a difficult road ahead, which should peg the Pound back at $1.29 levels and bring $1.28 levels back into play.
On the monetary policy front, BoE MPC member Cunliffe is scheduled to speak in the early afternoon. Following Cunliffe’s concerns over the negative effects of prolonged monetary policy easing, expect any dovish chatter to weigh on the Pound.
We’ve yet to hear of central banks wanting to step in as the coronavirus continues to spread. This may well change in the coming weeks…
At the time of writing, the Pound was up by 0.12% to $1.2921.
It’s a relatively busy day ahead on the U.S economic calendar. January durable goods orders and 2nd estimate GDP numbers for the 4th quarter are due out.
Barring deviation from 1st estimate numbers, expect the core durable goods and durable goods orders to have the greatest impact.
Following last week’s particularly disappointing PMI numbers, any slide in orders will pressure the Greenback further.
Initial weekly jobless claims and pending home sales figures for January are also due out. We will also expect the numbers to have a muted impact on the Dollar, however.
Outside of the numbers, market risk sentiment will continue to influence.
At the time of writing, the Dollar Spot Index was down by 0.06% to 98.939.
It’s a quiet day ahead on the economic calendar, with key stats limited to 4th quarter current account figures out of Canada.
We can expect the numbers to have a muted impact on the Loonie, however.
Focus through the day will be on the economic outlook and demand for crude oil, which remains Loonie negative.
The Loonie was down by 0.06% at C$1.3341 against the U.S Dollar, at the time of writing.
With over 28 years of experience in the financial industry, Bob has worked with various global rating agencies and multinational banks. Currently he is covering currencies, commodities, alternative asset classes and global equities, focusing mostly on European and Asian markets.