Australian Dollar:
The Australian dollar offered little for investors throughout trade on Friday failing to recover the losses suffered on the back of shrinking private capital expenditure and an improved U.S. core inflation read. Bouncing along within a 60 point range for much of the day investors appeared to be marking time in the lead up to key US data sets. Better than expected preliminary GDP and consumer sentiment reports forced the Aussie back toward the 0.78 cent handle closing the week in familiar territory. Attentions shift to the RBA and its second policy meeting for 2015. With the majority of analyst calling for stability there are some economists suggesting a 2nd consecutive rate cut is an inevitability. The unemployment rate remains stubbornly high, wage growth is at its lowest level in 17 years and employment growth has weakened. Throw into the mix a softening mining sector and an inflated dollar and there is certainly room for RBA action. With little on the domestic docket to drive direction through trade on Monday the AUD will likely find support in China’s decision (Saturday) to cut its benchmark rate in a bid to improve growth while markets look to Manufacturing reports for further direction throughout trade.
- We expect a range today of 0.7620 – 0.7920
New Zealand Dollar:
Much like its trans-Tasman counterpart the New Zealand dollar failed to recoup the losses suffered throughout trade on Thursday edging marginally higher Friday to close the week just above 0.7550. Taking its cues from offshore data sets the NZD held up well in the face of stronger than anticipated U.S. fourth quarter GDP growth and consumer sentiment. With little domestic data on hand Monday direction will stem from offshore stimuli headlined by a Chinese HSBC manufacturing report with support derived from the Peoples Bank of China’s decision (Saturday) to cuts its benchmark rate in a bid to fuel growth.
- We expect a range today of 0.7450 – 0.7650
Great British Pound:
Sterling failed to recoup the losses suffered on Thursday offering little to spark investor’s imagination through trade on Friday. With little domestic data on hand the Pound took its cues from offshore stimuli edging lower into the close as better than anticipated U.S. fourth quarter GDP and consumer sentiment helped cement greenback gains. Attentions this week turn to a busy macroeconomic calendar headlined by the Bank of England’s policy announcement Thursday while the more immediate focus turns to Manufacturing PMI for direction through trade on Monday.
- We expect a range today of 1.9620 – 1.9950
Majors:
The US Dollar ended the week little changed Friday marking an eight straight monthly gain for the world’s base currency when measured against a basket of 6 major counterparts; as investors shrugged off a string of poor data sets throughout February on expectations the Fed will adjust its benchmark interest rate at some point this year. Preliminary fourth quarter GDP nudged above expectations writing in at 2.2% while consumer sentiment held near 8 year highs with investors’ expectations for consumer driven growth improving. Any advance was checked by a 13 point dip in Chicago PMI index and highlights an underlying vulnerability in the US manufacturing sector. It is however important to note that size of the depreciation hints at an anomaly with investors blaming poor weather, the closure of LA and Long Beach sea ports for delays in capital and a stronger dollar for decline in demand for US exports. Attentions this week turn to a raft of Central bank policy meetings with the Australian Reserve Bank, Canadian Central Bank, Bank of England and European Central Bank all due to release policy updates while Friday’s Non-Farm Payroll report will be crucial in providing direction and governing expectations leading into the Fed’s March 17-18 assembly.
Data releases
- AUD: AIG Manufacturing Index, MI inflation Gauge, New Home Sales, Company Operating profits and Commodity Prices
- NZD: No Data
- JPY: Final Manufacturing
- GBP: Nationwide HPI, Manufacturing PMI, Met Lending to Individuals, Mortgage Approvals and M4 Money Supply
- EUR: CPI Flash Estimates, Core CPI Flash Estimates and Unemployment Rate
- USD: Core PCE Price Index, Personal Spending, Personal Income, Final Manufacturing PMI and ISM Manufacturing PMI
Recommended Content
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.