NZD weaker after rash of poor data
We heard overnight that New Zealand’s exports and imports contacted in May. That, and a 0.9% drop in global dairy prices, served to weaken the New Zealand Dollar. GBPNZD is half a cent higher at 1.9530 this morning.
GBP slides on concerns of delay to economy reopening
Fears are being expressed over a delay to the government’s target date for the reopening of the rest of the UK economy. The 21st June deadline is looking a little rocky and that has dropped the Pound by a cent against the US Dollar ($1.4150 this morning) and ¾ of a cent against the Euro. GBPEUR is 1.1575 at the time of writing.
The Pound should have been buoyed by news that there were no deaths related to covid in the previous 24 hours but the localised growth of the Indian strain of the disease is a worry. What was also worrying traders was a set of figures showing the first three months after Brexit were bad for the UK economy. However, the inevitability of that ‘early days’ shock seems to have been taken into account.
Australian GDP recovers
Overnight news also included an acceleration in Australia’s recovery. GDP growth in the first three months of the year was 1.8%; much stronger than expected and enough to bring annualised growth back into positive territory at 1.1%, after three-quarters of contraction. The GBPAUD rate bottomed out at 1.8225 or thereabouts before the Pound recovered a little.
CAD consolidates after strong GDP rebound
We had Canada’s GDP data yesterday. That reflected a really solid recovery at 6.6%. That was the first positive reading in 5 quarters of data. Surprisingly, all it did was stall the Canadian Dollar’s decline around just below 1.71 against the Pound. I expected a more robust reaction but I was wrong. The forecasts for today’s Canadian building permits data are not good. So maybe that tempered the enthusiasm of traders.
For today, we have a smattering of Purchasing Managers Indices but it will be a day of central banker monitoring for most traders. The BOE, ECB, and Federal reserve bosses will be in full flow at various events, so we will listen with breath abated. Any hints of early rate hikes will be very influential in this environment.
And Canadian MP, William Amos, has embarrassingly stepped down from many of his duties after being caught naked on a video conference….for the 2nd time! I know we are all yearning to see each other ‘in the flesh again’. Maybe he just misinterpreted the mood.