|Day's range||0.687 - 0.689|
|52-week range||0.6426 - 0.7398|
Negative sentiment towards the global economic outlook weighed on the commodity currencies, with economic data and Brexit putting the Pound in Focus.
This week, the economic news shifts back to the Australian Dollar. The week will start with the Aussie supported by the resumption of trade talks between the United States and China, but this time in Washington. Both parties cited progress in last week’s trade talks which took place in Beijing.
Risk appetite delivers early moves across the riskier asset classes. With a light economic calendar, vehicle sales out of China will be of interest.
Theresa May’s troubles continue to pin back the Pound and the stats have provided little help. More swings on the cards later today.
Investing.com -- The dollar was edging higher against major European currencies early Friday in Europe after weak Chinese inflation data overnight reinforced concerns about global growth.
Brexit and Trade talks are on the political agenda, while Germany’s GDP numbers and retail sales figures out of the U.S will be in focus on the data front.
Early in the trading session, China released January trade balance data that beat consensus expectations in both the Chinese Yuan (CNY) and U.S. Dollar (USD) terms. Looking at the CNY side, the trade balance figures came in at 271.42 billion compared to 395 billion CNY reported in December. As far as the USD side is concerned, the trade balance beat expectations of $33.50 billion surplus by coming in at $39.16 billion.
With the start of high-level trade talks between the United States and China, Asian market traders are taking a cautious approach to the stock market on Thursday. However, under the cautiousness, there is some optimism. China released better-than-expected January trade balance data early Thursday. The news seemed to have a positive effect on the Australian and New Zealand Dollars, but failed to add to this week’s strength in the major Asian stock markets.
Investing.com - The Chinese yuan was little changed on Thursday in Asia after better-than-expected trade numbers for January, as analysts warned of the presence of business distortions due to national holidays and cyclical trends.
Will inflation numbers deliver a boost for the Pound or the Dollar, or will they ease pressure on the respective central banks to make a move?
Despite the weaker outlook, and an indication that the next move in interest rates could be lower, the New Zealand Dollar is soaring against the U.S. Dollar early Wednesday. This suggests a “sell the rumor, buy the fact” reaction to an oversold market.
Investing.com -- After an eight-day winning streak, the dollar has finally pulled back in early trading in Europe Wednesday, as demand for safe-haven assets weakens on signs that the U.S. federal government won’t shut down again this year.
The RBNZ is widely expected to keep its benchmark interest rate unchanged at 1.75%. Furthermore, investors expect Governor Orr to issue a more “dovish” statement, joining the other major central banks with this assessment. Turning dovish will be a huge flip by the central bank since it sounded more upbeat in its last monetary policy statement released in November.
Investing.com - The NZD/USD pair advanced on Wednesday in Asia after a Reserve Bank of New Zealand (RBNZ) decision earlier in the day.
The NZD/USD is under pressure because the Reserve Bank of New Zealand is expected to leave interest rates unchanged at its policy meeting on Wednesday, but may adopt a more dovish tone and cut growth forecasts.
Aussie and Kiwi traders will be watching this week for new developments regarding U.S.-China trade relations as negotiations are set to begin later this week. Traders are nervous because last week White House economic advisor Larry Kudlow said there is a “pretty sizable distance to go” before China and the U.S. reach a deal. There was also a report that said U.S. President Trump and Chinese President Xi Jinping will not be meeting before the March 2 deadline to get a deal done.
Economic data out of the UK and Brexit chatter keeps the Pound in focus. Across the pond, expect chatter from Capitol Hill to also influence in the day.
Investing.com - The U.S. dollar edged up against most other currencies on Monday in Asia as worries about global growth, U.S. politics and the Sino-U.S. trade war underpinned safe haven demand for the greenback.
This week, the RBNZ will make its first interest rate decision since November. Since then a lot has taken place with the majority of major central banks downgrading their outlooks for the global economy. The RBNZ is expected to leave its benchmark rate at 1.75%.
The RBA dropped its long-standing prediction that an improving economy meant the next move was likely to be upwards. The New Zealand Dollar tumbled last week in sympathy with the drop in the Australian Dollar and in anticipation of a similar tone from the Reserve Bank of New Zealand (RBNZ) this week. The Dollar/Yen rose last week mostly on safe-haven buying related to a downgrade of the Euro Zone economy by the European Commission and lower demand for higher risk assets.
A series of events throughout the week helped drive the dollar even higher, but for different reasons. This time, it wasn’t higher yields driving the greenback higher, but rather safe-haven buying related to growing concerns over the weakening global economy and renewed concerns over U.S.-China relations which drove down appetite for higher risk assets.
The economic calendar for the current week remained relatively quiet with a couple of monetary policy decisions from Reserve Bank of Australia and Bank of England.
It’s risk off through the early part of the day, weighed by central bank economic forecast revisions. Trade data out of Germany is in focus today.
Like the other major central bankers, look for the RBA to acknowledge the weakening global economy and the greater risks ahead if the trade dispute between the United States and China continues. Furthermore, the RBA is likely to acknowledge some of the strength in the economy especially the labor market, but the central bank may be forced to cut its forecast for GDP and inflation.