The Australian Dollar trended bullishly yesterday, thanks to a combination of strong domestic data and an improved outlook for the economy. Building approvals saw a strong 7% surge on the month after an upwardly revised – but still disastrous – 11.8% slump in November and foreign reserves climbed by over AU$6 billion. Additionally, the Department of Industry, Innovation and Science forecast that Australia’s energy and resource exports have increased 30% year-on-year during the 2016-17 fiscal year. The value of those exports would therefore be a record AU$204 billion, with the outlook for the 2017-18 year looking similar.
Australian retail sales figures for November are the most impactful domestic data release on the economic calendar today.
AUD/GBP stormed ahead yesterday, at one point registering gains of over 1.7%, thanks to the adverse reaction to comments Prime Minister Theresa May made over the weekend. The Prime Minister reiterated that controlling immigration was key to the government’s plans for the negotiations, while saying that she was not interested in keeping ‘bits’ of EU membership. Taken as a strong sign the UK is heading for a ‘Hard Brexit’, May’s comments allowed the Australian Dollar to Pound Sterling exchange rate to climb to an eight-and-a-half-week high.
British Retail Consortium sales statistics for December are unlikely to be enough to dissuade traders from going long on AUD/GBP today.
While the Euro weakened against the Australian Dollar and New Zealand Dollar, positive domestic data was elsewhere supporting the common currency higher. Despite a slower-than-expected pace of growth on the month, German industrial production figures for November impressed with a 2.2% annual print; better than the expected acceleration from 1.6% to 2.2%. German trade figures also impressed, with a leap in export growth from 0.5% to 3.9%, as well as a jump in the Eurozone Sentix investor confidence index for January rising from 10 to 18.2.
There is no Eurozone data on the economic calendar in the near future.
A rudderless US Dollar yesterday managed to hang on to gains versus weaker currencies, while slumping versus the commodity-correlated Australian Dollar as risk-appetite heated up. A lack of any notable data left the ‘Greenback’ without momentum, having already struck a notable high of late on the back of a strong monetary policy outlook for this year.
US consumer credit data is the only medium-impact data on the calendar today.
Crude oil slumped yesterday, dragging the Canadian Dollar lower as WTI and Brent both registered losses of around -2.4% at the height of the sell-off. The bearish move came after Friday’s US oil rig count data showed a tenth consecutive weekly rise in the number of operational platforms, taking the number up to 529 and marking an eighth consecutive month of recovery. This sparked fears that the oil production cut agreed by OPEC member nations would be counterbalanced by an increase in production from US companies, leaving the world still facing a global oversupply of crude.
Early tomorrow morning will bring the latest Canadian building permits data, this time for November.
Yesterday’s warming risk market put the New Zealand Dollar in high demand, with the ‘Kiwi’ racking up bullish gains against all its peers, save for a slight edge above opening levels for NZD/AUD. The good news for Australia’s exports also gave the ‘Kiwi’ a boost – New Zealand also exports minerals, so traders were perhaps hoping that New Zealand forecasts may be revised upwards as well in the near-term.
There is no domestic data set for release today, but the December Chinese consumer price index figures could have a serious impact upon market risk appetite and therefore on the New Zealand Dollar.
January 10th 07.00 USD Consumer Credit (NOV) US$18.48
January 10th 11.01 GBP BRC Sales Like-For-Like (YoY) (DEC)
January 10th 11.30 AUD Retail Sales s.a. (MoM) (NOV) 0.4%
January 10th 12.30 CNY Consumer Price Index (YoY) (DEC) 2.3%
January 11th 00.30 CAD Building Permits (MoM) (NOV) -5.0%
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