The Aussie Dollar rallied as the RBA unexpectedly opted against a rate cut while the Kiwi Dollar gained on supportive commodity exports and housing price data.
Talking Points:
Aussie Dollar Soars After RBA Unexpectedly Leaves Rates Unchanged
NZ Dollar Higher on Upbeat Commodity Exports, House Price Figures
British Pound May Not Find Support in Upbeat Construction PMI Data
The Australian Dollar outperformed in overnight trade, rising as much as 0.7 percent on average against its leading counterparts, after the RBA unexpected opted not to cut interest rates again at today’s monetary policy meeting. Economists were projecting a 25bps reduction while priced-in expectations reflected the implied probability of further easing at 60 percent. RBA Governor Glenn Stevens left the door open to future stimulus expansion however, saying the central bank will “assess the case for such action at forthcoming meetings”.
The New Zealand Dollar likewise advanced, finding support in upbeat economic news-flow. ANZ Commodity Price Index figures showed the price of the island nation’s raw-material exports jumped 1.8 percent in February, marking the largest increase since April 2013. That helped boost the outlook for the pivotal external sector, which accounts for close to 30 percent of GDP. Separately, the QV House Price gauge rose for a second consecutive month, posting the largest gain in five months. Meanwhile, the Yen traded higher as a drop on Japan’s benchmark Nikkei 225 stock index fueled demand for the safe-haven currency.
The economic calendar is relatively quiet in European trading hours. UK Construction PMI figures are expected to show the pace of homebuilding sector activity growth narrowly slowed in February. UK economic news-flow has outperformed relative to consensus forecasts over recent weeks, opening the door for an upside surprise. A similar outcome on the Manufacturing PMI print failed to drive the British Pound higher yesterday however, warning the currency may likewise look past today’s report. Elsewhere, the fourth-quarter Swiss GDP data is due to show output expanded 0.3 percent, marking a slowdown from the 0.6 percent expansion registered in the three months through September.
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