Disappointing Canadian GDP dips CAD
Yesterday’s data showed Canadian economic growth slowed in Q2. A 0.3% decline doesn’t sound like a lot but it was well below market expectations and the Bank of Canada’s own forecast of 2.0% growth. Many analysts have cited reduced household spending as the reason for the unexpectedly poor numbers. The GBPCAD exchange rate reacted by spiking to just above CAD 1.74 but this pair is a full cent lower again this morning.
Aussie GDP surprises to the upside
Australian GDP growth data was released overnight. That offered the opposite in terms of surprises. 9.6% annual growth was comfortably higher than the expected 9.2% and, when you consider the continuing covid concerns in parts of Australia, that is quite remarkable. The GBPAUD exchange rate dropped nearly a full cent on the news and starts today at AUD 1.8730. The momentum could carry this pair lower, as suggested yesterday, A 1.84 to 1.85 target is fairly likely.
Sterling stable after solid house price data
The caveat to that is the fact that Sterling is holding up relatively well in other areas. GBPUSD is still hovering at $1.3750 and GBPEUR is stable at €1.1650 or thereabouts. This morning’s surprisingly strong House price index in the UK will help the Pound. 11% house price inflation isn’t to be sniffed at, especially with everything else going on. We will also see the Manufacturing PMI for the UK this morning and that is expected to be slightly softer than the last one but still in a healthy growth mode.
This afternoon brings the PMI for the US manufacturing sector and we will have two other influential pieces of data; US crude oil inventories and the ADP clerical jobs data for the US of A as well. I think it is safe to expect some USD volatility on the first day of the month as well. The EURUSD rate is a good bellwether for that. It starts Wednesday at $1.1800, up from Friday’s low of $1.1735 and it is butting its head against that $1.18 ceiling.
That is about all there is to report today. Welcome to September. And before you ask, I have no idea where the rest of 2021 went and before you comment, yes I know the Christmas stuff will be in the shops soon. Mad isn’t it.