- Aussie data mixed and AUD maintains strength
- No change expected from Bank of Canada (BOC)
By David Johnson
Australian economic growth was slightly weaker than expected in the third quarter of the year; 0.6% as opposed to the forecasts of 0.7-0.8%. Household consumption only rose by 0.2% on the quarter and that was the slowest growth since 2005. However, there was a bright spot in the data in the form of increased investment spending and business profits were up. So the Australian dollar didn’t strength but it maintained most of the gains it has made in the past few days.
The US Dollar has strengthened up a little overnight in spite of one member of the Federal Reserve saying he would not support another interest rate hike this month. Charles Evans also went on to suggest US rates should stay put until the summer. Oil prices slipped after US inventories rose and that tends to strengthen the USD.
The Bank of Canada (BOC) makes its interest rate announcement this afternoon. There is no likelihood of a rate movement but their economy is doing reasonably well, so there may be talk of rate hikes in the statement that accompanies the announcement. The Sterling – Canadian Dollar rate is four and a half cents lower than the high we saw last week in preparation for that announcement.
A sharp drop in Eurozone retail sales gave the Euro a negative whack yesterday. A 1.1% drop counteracted all of the gains in last month’s data. However, a smattering of positive Purchasing Managers’ indices (PMI) from across the Eurozone steadied the ship. Today brings German factory orders data which we believe will be quite negative plus a couple of European Central Bank (ECB) speeches.
Aside from these few newsworthy items, it is likely to be a quiet day. If you need something to ponder during the down-time, spare a thought for Robbie Davidson, founder of the Flat Earth International Conference. His latest film ‘Scientism Exposed 2’ sets out to make people question everything. One of his most strident claims is that the Earth is in fact flat. I’ve lost you haven’t I!