AUDUSD (0.769): The Aussie dollar was relatively stronger against the Greenback this week led by strong gains in the jobs market for the month of May. Australian unemployment rate declined to 6% from a revised 6.1% previously. The data managed to push the Aussie to trade briefly above 0.775 and was seen to be largely consolidating here before giving way and dropping below 0.77 later in the week. The improvement in the labour market is likely to be a welcome change for the RBA which has been seen cutting interest rates this year and the pickup in the labour market could help the RBA keep its monetary policy stable for a while.
- NAB business confidence 7 vs. 3 previously
- ANZ Job advertisements m/m 0.0% vs. 2.5% previously
- Home loans m/m 1.0% vs. -1.8%
- Westpac consumer sentiment -6.9% vs. 6.4%
- MI Inflation expectations 3.0% vs. 3.6% previously
- Employment change 42k vs. 12.1k
- Unemployment rate 6% vs. 6.2%
EURUSD (1.122): EURUSD continues to be plagued by the Greece saga which seems to be never ending. The early part of the week saw the Euro surging higher on a confirmed 0.4% GDP growth and initial news bites about Greece and its lenders making progress. The Euro surged to post weekly gains near 1.135 highs, but failed to hold on to the gains and dropped back to trade near the 1.12 region. Late Thursday, the IMF announced that it was pulling out of talks due to lack of progress, which saw the sentiment in the Euro sour. Germany’s economic data continues to remain positive, posting better than expected print in the industrial production and wholesale price index readings.
- German industrial production m/m 0.9% vs. 0.6%
- Sentix investor confidence 17.1 vs. 18.9
- Revised Eurozone GDP q/q 0.4%, unchanged
- French industrial production m/m -0.9% vs. 0.4%
- Italy industrial production m/m -0.3% vs. 0.3%
- French CPI m/m 0.2% vs. 0.3%
- German WPI m/m 0.5% vs. 0.3%
- Eurozone industrial production m/m 0.1% vs. 0.4%
NZDUSD (0.695): The Kiwi weakened dramatically this week as the RBNZ decided to cut its overnight cash rate by 25bps to 3.25% with further rate cuts in sight. The Kiwi fell from weekly highs near 0.72 to trade below 0.7 posting fresh yearly lows. Across the board, the Kiwi weakened considerably with the AUDNZD seeing sharp gains this week, rising close to 2%
- Manufacturing sales q/q -2.8% vs. -1% previously
- RBNZ Official cash rate 3.25% vs. 3.5%
- Business manufacturing index 51.5 vs. 51.7
USDJPY (123.7): The Japanese Yen’s weakness hit a roadblock this week as BoJ’s Kuroda commented that the Yen had no further scope of weakening. The comments sent the USDJPY decline from weekly open near 125.5 to trade near 123.5 towards late Friday. Economic data from Japan this week saw the quarterly GDP showing decent gains of 1% with other economic data by and large managing to meet the estimates.
- Final GDP q/q 1% vs. 0.7%
- Bank lending y/y 2.6% vs. 2.6% previously
- Final GDP price index y/y 3.4% vs. 3.4%
- Economy watchers sentiment 53.3 vs. 54.2
- M2 Money stock y/y 4% vs. 3.6%
- Consumer confidence 41.4 vs. 41.9
- Prelim machinery tools orders y/y 15% vs. 10.5% previously
- Core machinery orders m/m 3.8% vs. -2%
- PPI y/y -2.1% vs. -2.2%
- Revised industrial production m/m 1.2% vs. 1%
USDCAD (1.234): The Loonie was stronger against the Greenback right from the start, as USDCAD declined from weekly open near 1.2466 to briefly test the support near 1.22 levels. It was only since Thursday that the Canadian dollar gave back some of its gains led by stronger retail sales report from the US. Economic data from Canada this week saw a robust housing sector data with both the housing starts and building permits posting solid gains for the month.
- Housing starts 202k vs. 187k
- Building permits m/m 11.6% vs. 3.4%
- NHPI m/m 0.1% vs. 0.2%
- Capacity utilization rate 82.7% vs. 83.1%
GBPUSD (1.548): The Cable was trading relatively stronger this week after briefly declining to weekly lows below 1.525. Industrial production data saw strong gains which saw the Pound Sterling rally to make weekly highs near 1.533. NIESR’s GDP estimates were also pointing to a stronger GDP growth for the month, with expectations of 0.6%.
- Manufacturing production m/m -0.4% vs. 0.1%
- Industrial production m/m 0.4% vs. 0.1%
- NIESR GDP estimates 0.6% vs. 0.5% previously
- RICS House price balance 34% vs. 35%
- Construction output m/m -0.8% vs. 0.1%
US Dollar Index (95.27): The US Dollar index saw a choppy ride this week as early Monday, news broke that US President Obama was concerned about the strength of the US Dollar. While the rumors were later dismissed, it did manage to weaken the Greenback which fell at the weekly open near 96.5 to post weekly lows below 94.5. It was the retail sales data that managed to support the US Dollar Index, which saw the currency rally back to trade near 95.25 level of support.
- NFIB small business index 98.3 vs. 97.1
- Wholesale inventories m/m 0.4% vs. 0.2%
- Core retail sales m/m 1% vs. 0.7%; retail sales m/m 1.2% vs. 1.1%
- Unemployment claims 279k vs. 277k
- Import prices m/m 1.3% vs. 0.9%
- Business inventories m/m 0.4% vs. 0.2%
- PPI m/m 0.5% vs. 0.4%; Core PPI m/m 0.1% vs. 0.1%
