AUDUSD (0.71): The Australian dollar is down -0.81% to the Greenback with prices posting lower highs since the past few weeks. Data from Australia was largely limited to new motor vehicle sales which increased 1.0% against estimates calling for a -3.7% decline while the housing price index was soft with gains of 2.0%. The RBA’s meeting minutes were also released this week but did little to move the Aussie much. The Australian dollar remains the second weakest commodity currency.
- RBA releases monetary policy minutes
- HPI q/q 2.0% vs. 2.10%
- New Motor vehicle sales m/m 1.0% vs. -3.7% previously
- MI leading index m/m -0.20% vs. 0.10% previously
EURUSD (1.08): The Euro is down -1.55% this week with monetary policy divergence being the main theme. However, prices were volatile with EURUSD testing highs of 1.105 before giving back the gains. Data from the Eurozone was limited to flash manufacturing and services PMI which did little to move the currency much. Eurozone inflation was confirmed at 0.20% annualized for the year and 0.90% on the core.
- Industrial production m/m 0.60% vs. 0.30%
- ECB President Draghi speech
- German ZEW economic sentiment 16.1 vs. 15.2
- Eurozone ZEW economic sentiment 33.9 vs. 34.4
- Employment change q/q 0.30% vs. 0.20%
- French flash manufacturing PMI 51.6 vs. 50.6; flash services PMI 50.0 vs. 50.7
- German flash manufacturing PMI 53.0 vs. 52.7; flash services PMI 55.4 vs. 55.5
- Eurozone flash manufacturing PMI 53.1 vs. 52.8; flash services PMI 53.9 vs. 54.0
- Final CPI y/y 0.20% vs. 0.10%; Core CPI y/y 0.90% vs. 0.90%
- Trade balance 19.9bn vs. 22.3bn
- German Ifo business climate 108.7 vs. 109.2
NZDUSD (0.67): The Kiwi is down -0.15% for the week after prices touched a new weekly high to 0.682 this week. Data from New Zealand included the quarterly GDP which surprised, rising 0.90% up from 0.30% previously. Global dairy trade continued to remain weak, however, rising 1.90% down from 3.60% previously. With the RBNZ signaling a neutral stand on interest rates after a 25bps rate cut, the Kiwi has remained as one of the strongest commodity currencies in comparison to its peers.
- GDT Price Index 1.90% vs. 3.60% previously
- Current Account -4.75bn vs. -4.85bn
- GDP q/q 0.90% vs. 0.30% previously
- ANZ Business confidence 23.0 vs. 14.6 previously
USDJPY (121.4): The Dollar-Yen is up a modest 0.52% for the week with the Yen staying firm across the board as a safe haven currency. The Yen initially strengthened with USDJPY posting a weekly low below 120.48 but managed to move higher. The FOMC gains saw USDJPY rally to 122.84, but the price fell back again strongly. Earlier on Friday, the BoJ added some volatility as news initially announced saw the BoJ launch a new easing program. But investors soon bought the Yen as the BoJ’s new purchase program was seen to be too little. USDJPY squeezed higher to 123.48 but gave the gains strongly to trade at 121.4.
- Tankan manufacturing index 12 vs. 11
- Tankan non-manufacturing index 25 vs. 23
- Revised industrial production m/m 1.40% vs. 1.40%
- Tertiary industry activity m/m 0.90% vs. 0.50%
- Flash manufacturing PMI 52.5 vs. 52.6 previously
- BoJ leaves monetary policy unchanged
- BoJ press conference
USDCAD (1.39): It has been a week of bad news for the Canadian dollar, which continues to be hit by weak economic data, falling Oil prices and a stronger US Dollar. Prices were trading at 1.40 briefly in today’s trading with USDCAD posting solid gains of nearly 1.88% for the week. USDCAD is now trading near the highs last seen in 2002. Economic data this week from Canada included manufacturing sales which declined -1.10% while inflation declined -0.30% on the core and -0.10% on the headline. Wholesale sales also fell -0.60% sending the Canadian dollar weaker.
- Manufacturing sales m/m -1.10% vs. -0.40%
- BoC Financial system review
- Foreign securities purchases 22.1bn vs. 6.13bn
- Core CPI m/m -0.30% vs. 0.0%; CPI m/m -0.10% vs. 0.10%
- Wholesale sales m/m -0.60% vs. 0.10%
GBPUSD (1.49): The British Pound is trading near an 8-month low with prices near 1.49. For the week, the Pound fell -2.06% to the Dollar. The declines came about despite the UK’s unemployment rate falling to 5.20% but offset by weaker earnings growth, which increased at a slower pace of 2.40%. Retail sales were also higher, but it did little to boost the Cable as many expect this to be a one-time increase on account of the UK’s Black Friday sales. Overall, the British Pound continues to remain weak to the Dollar with expectations of a slower rate hike path from the BoE in 2017 and alleviated concerns of Brexit.
- Rightmove HPI m/m -1.10% vs. -1.30% previously
- MPC Member Shafik speech
- CPI y/y 0.10% vs. 0.10%; Core CPI y/y 1.20% vs. 1.20%
- PPI Input m/m -1.60% vs. -1.0%; PPI output m/m -0.20% vs. 0.0%
- Average earnings index 3m/y 2.40% vs. 2.50%
- Unemployment rate 5.20% vs. 5.30%
- Retail sales m/m 1.70% vs. 0.60%
USDCHF (0.99): USDCHF is up 1.25% this week after prices fell strong off 1.03 highs two weeks ago. Prices were trading near the lows but managed to rally on the FOMC rate hike. At the time of writing, USDCHF is trading at 0.995. On the economic front, there was not much of data from Switzerland this week. Producer price index increased 0.40% above estimates of 0.10% with no other major economic releases scheduled during the week.
- PPI m/m 0.40% vs. 0.10%
- ZEW Economic expectations 16.6 vs. 0.0 previously
- SNB releases quarterly bulletin
US Dollar Index (99): The US Dollar Index is up 1.52% this week trading briefly near 99.30 before easing back. The currency remains strong as the US Federal Reserve hiked interest rates by 25bps at the FOMC meeting on Thursday and signaled further rate hikes in the coming year. Other economic data this week included inflation numbers which came in largely as expected. Headline inflation was flat at 0.0% while core CPI increased 0.20% matching expectations.
- CPI m/m 0.0% vs. 0.0%; Core CPI m/m 0.20% vs. 0.20%
- Empire state manufacturing index -4.6 vs. –5.7
- NAHB housing market index 61 vs. 63
- TIC Long term purchases -16.6bn vs. 32.4bn
- Building permits 1.9mn vs. 1.16mn
- Housing starts 1.17mn vs. 1.14mn
- Industrial production m/m -0.60% vs. 0.0%
- Flash manufacturing PMI 51.3 v. 52.7
- FOMC raises fed funds rate to 0.25% – 0.50%
- Philly Fed manufacturing index -5.9 vs. 2.1
- Unemployment claims 271k vs. 271k
- Current account -124bn vs. 123bn