- Aussie data improves but Australian Dollar fails to gain ground
- Italian election results inconclusive
By David Johnson
Positive data fails to ignite Australian Dollar
The Australian Dollar failed to gain ground overnight despite a couple of positive data releases. The number of building approvals shot up by over 17% after a 20.6% drop in December, although private house approvals were down marginally. However, Australian company pre-tax profits were up 19% in the three months to December. That ought to have boosted the AUD, but we will probably get upbeat Australian Retail Sales figures overnight tonight and a no change decision from the Reserve Bank of Australia (RBA). The words the RBA uses will be influential, but events elsewhere are also impacting everything.
Service sector in sharp focus
Not the least of these factors is the US President apparently embarking on a series of trade wars, despite the British Prime Minister’s warning not to do so. However, this afternoon is dominated by US service sector data. The forecasters are looking for a small scale drop in confidence in that sector and the US Dollar, which has had a very strong few days, ought to give up some of its gains if that is the case.
The British version of the service sector survey is due at 09:30 and that is expected to be a tad up on the previous month, but the Pound is more heavily influenced by Brexit talk than anything else at the moment.
The Euro is in fairly stable mode ahead of this morning’s release of Eurozone retail sales data. An annual rise of 2.1% is envisaged and that should boost the Euro somewhat. It is currently slap bang in the middle of its ranges against the Pound and US Dollar.
Effects of Italian election results still to be determined…
The other major factor that will affect the strength of the Euro is the final shape of the new Italian government and just how right wing it is in the end. The recently formed Five Star Movement is in second place after Silvio Berlusconi’s right-wing coalition, so there is a long way to go before any kind of government can emerge.
Taking the high road
And I have to admit to feeling a little sick seeing Piers Morgan trying to adopt the high moral ground over the Bradley Wiggins and Team Sky news this morning. I think my views are summed up in a Twitter exchange between Morgan and a chap called Colm Quinn in 2012.
Morgan tweeted – ‘and yes I was disappointed @bradWiggins didn’t sing the national anthem either. Show some respect to your Monarch please!’
Colm’s response was – ‘@piersmorgan, I was disappointed when you didn’t go to jail for insider dealing or phone hacking, but you know, each to his own.’ Colm Quinn I salute you.