USD stalled by pending home data
March went out with a bang. As mentioned yesterday, the UK Q4 GDP was upgraded to 1.3% in the three months to December, which gave the Pound support. Canada’s GDP was also better than forecast at 0.7% growth in January alone. Oddly, the Canadian Dollar stayed in its tiny range between C$ 1.73 and 1.7370 against the Pound.
The US pending home sales data was a howler. The 10.6% contraction in February was four times as bad as the market forecast. We did see some weakness in the USD, taking GBPUSD up to $1.38 at one point, but we are 40 basis points lower this morning. The EURUSD rate reflected a similar result, spiking to $1.1750 before slipping back half a cent.
AUD hit by poor domestic and soft Chinese data
The last three days have produced a very solid rally in the GBPAUD exchange rate. From below AUD 1.80 on Monday, we start Thursday around AUD 1.8250. Mixed data from Australia has left investors seeking safer homes for their funds. Last night’s data was a case in point; a 1.7% decline in home loans, a 0.8% decline in retail sales and an AUD 2.6 billion contraction in Australia’s trade balance, all making life challenging for the Aussie. Throw in a surprise dip in the Chinese Caixin manufacturing confidence index, and the decision by investors to walk away is even more understandable.
It’s a similar pattern for the Kiwi Dollar. GBPNZD has risen from NZD 1.92 to 1.98 in 10 days and seems to have the momentum to challenge the magic NZD 2.00 level if we get any positive UK catalyst.
We get a smattering of manufacturing sentiment indices (PMIs) from across the Eurozone and the UK today, plus the US equivalent from the ISM.
And there is a ‘tentative’ entry in today’s diary that says President Biden may speak. I think it unlikely his carers will let that happen after the last press conference. That was awkward.
US employment report – how to make it work for you
This is a foreshortened week for many economies, and there will be virtually no trade in the forex markets until Tuesday. However, it does seem the US employment report will still be published tomorrow. There is every chance the USD and many other currencies will have shifted before the UK reopens after the weekend. The tool to take advantage of any volatility is the automated order, which can trigger even if you and I are sipping cocktails or kipping. Speak with your Halo Financial contact to see how that might be deployed to your advantage.
Crazy news day
Aside from the markets, some amazing news stories are doing the rounds today. South Australia Police have trained Dachshunds in their Small Area Urban Search And Guided Evacuation Squad (SAUSAGES). An Australian Reptile Park is offering a day with the Crocodiles for all the family. Volkswagen is changing its name in North America to Voltswagen, to get with the times. IKEA is offering designer dog wear. NASA has developed an anti-gravity trampoline. And subway in New Zealand is now offering cookies made with coriander. That’s a big Nope from me.)
And then I checked the date.
Have a great Easter break everyone.