- USD rebounds
- New Zealand trade balance swings into surplus
- Australian business confidence up
- Eurozone Gross Domestic Product (GDP) awaited
By David Johnson
US awaits State of the Union address
After weeks of rally, US stock markets corrected a little yesterday. That didn’t stop the US Dollar from recovering most of the losses it suffered last week. The GBP-USD rate is back below $1.40 and the Euro–USD rate is down into the $1.23s, as America prepares itself for the first State of the Union address from President Trump. I can summarise that speech now as ‘Everything’s great…it’s really really good….it really is.’ In technical terms, the GBP-USD rate is in an upward trend that started in late 2016 and that is currently giving the Pound support at 1.35 and resistance at 1.4250. The Euro–USD rate ought to target $1.26. That’s a 62% retracement of the fall from the 2014 high to the 2016 low.
Volatility for New Zealand Dollar
The New Zealand Dollar was volatile overnight after data showed the country’s trade balance swung into an unexpected surplus in December. Exports were up, imports were down; and that is good news for New Zealand. Some of that will be due to the weaker New Zealand Dollar and I am sure the Reserve Bank of New Zealand (RBNZ) is not complaining.
Mixed emotions about Australian economy
Across the Tasman Sea, Australian business confidence was up this month, but not as much as forecast. Nevertheless, that is good news for the Aussie Dollar and a bit of a worry for the Reserve Bank of Australia (RBA). They are concerned about inflation and certain parts of the Aussie economy overheating, so mixed emotions there.
Sterling to slide sideways?
This morning brings UK consumer credit and mortgage lending data. A slight drop in mortgage approvals is forecast and little change is expected in consumer credit levels. Sterling is likely to track sideways if that is the result.
Euro could shuffle on growth data
We will also see Eurozone economic growth data in the first estimate of the Quarter Four figures. Something in the order of 0.6 to 0.7% quarter on quarter growth is expected. So anything else will shuffle the Euro.
At the weekend, I actually watched a delivery driver come up to my gate and put a ‘We tried to deliver but you were out’ card in the letter box while I was standing there watching him. I had waited in for the delivery but he was back in his van so quickly, I still don’t have the package. When I went online to try to contact the delivery company, I was astonished to see how many forums and sites there are full of people suffering the same frustration. So do these drivers get paid for just getting to the addresses on their schedule rather than for actually making the drop? Does anyone know why they do this?