Aussie dollar recovers to around 0.9400
 |
Germany's economy grows more than expected |
| |
NZ Retail Sales Figures miss expectations |
| |
US Consumer Sentiment out tonight |
Market Update
The local unit has gained more than a cent from yesterday’s lows against the US dollar on the back of an equities rally and resumption riskier debt. From lows of sub 0.9300 the dollar capped its overnight gains at a touch over 0.9400, opening this morning near there.
With so much data released last night it might take a few days for traders to fully digest the economic implications.
The Philadelphia Fed Manufacturing Index improved slightly but remained contracting. The index rose to -15.6, from -24.9 in April. May's reading is the highest it's been in 5 months, the number had a positive effect on the greenback as economists were forecasting a reading of -19.0.
The TIC Net Long-Term Transactions released last night shows foreign buying of US financial assets rose more than forecast in March also posting the biggest gain in 5 months. Chinese, Japanese and UK investors all increased their holdings of US government debt despite recent rhetoric that they are looking to diversify away from primarily USD as their foreign exchange reserves.
Growth in Germany, the ECB’s largest economy, accelerated to the fastest pace in 12 years in the first quarter as companies stepped up spending. GDP rose 0.7% for the last quarter, economists were expecting growth to be 0.5%. Germany's resilience is giving the ECB breathing room to leave interest rates at six-year highs helping to fight increasing inflation giving the euro a boost.
The New Zealand dollar fell to the lowest level in more than 3 months after reports showed retail sales declined unexpectedly quickly. The report added to signs economic growth is slowing, strengthening the case for the New Zealand central bank to lower interest rates and further weakening the kiwi dollar. It's just a matter of time now before the NZ central bank enters an easing cycle.
Today has an inflation report released in NZ and RBA Assistant Governor Debelle speaks at a conference in South Australia. Tonight has two big data releases both out of the US Housing Starts and Consumer Sentiment. Any miss by US economic data could prove to be a boon for the Aussie.
Trading Range
0.9380 - 0.9430
Current Week's Releases
| Local Data |
Due |
Exp |
Prev |
|
Home Loans m/m
|
Mon |
-0.8% |
-5.9% |
| NAB Business Confidence |
Mon |
|
-4 |
| Commonwealth Budget |
Tues |
|
|
| WMI Consumer Sentiment m/m |
Wed |
|
-1.3% |
| NZ Retail Sales m/m |
Thurs |
|
-.7% |
| International Data |
Due |
Exp |
Prev |
| GBP Trade Balance |
Mon |
-7.5B |
-7.5B |
| US Core Retail Sales m/m |
Tues |
0.2% |
0.1% |
| US Core CPI m/m |
Wed |
0.2% |
0.2% |
| US Philly Fed Manufacturing Index |
Thurs |
-19.0 |
-24.9 |
| US Consumer Sentiment |
Fri |
62.0 |
62.6 |
|
