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Brexit, Elections and Economic Data Keep the GBP and USD in the Spot Light

Bob Mason
Brexit and EU Elections along with UK retail sales figures to influence the GBP, with durable goods orders out of the U.S also in focus.

Earlier in the Day:

Following a quiet Thursday, New Zealand’s April trade data and Japan’s April inflation figures provided direction early on.

In addition to the stats, the markets also responded to economic data out of the Eurozone and the U.S and overnight news on trade.

For the Kiwi Dollar,

The trade deficit narrowed from NZ$5,710m to NZ$5,480 year-on-year in April. According to figures released by NZStats,

  • The value of total goods exports increased by NZ$581m (12%), year-on-year, to NZ$5.5bn.
    • The increase was attributed to a rise in exports of dairy products, logs, and kiwifruit.
    • Exports of dairy products increased by NZ$124m to NZ$1.3m.
  • The value of total goods imports rose by NZ$348m (7.3%) to NZ$5.1bn, year-on-year.
    • The increase was attributed to an NZ$138m increase in the imports of aircraft and parts.
    • Partially offsetting the increase was an NZ$184m fall in the import of motor vehicles.

The Kiwi Dollar moved from $0.65228 to $0.65241 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.03% to $0.6518.

For the Japanese Yen,

According to figures released by the Ministry of Internal Affairs and Communication, the annual rate of core inflation picked up from 0.8% to 0.9%. The figures were in line with forecasts.

The Japanese Yen moved from ¥109.531 to ¥109.534 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.07% to ¥109.69 against the U.S Dollar.

Elsewhere,

At the time of writing, the Aussie Dollar was down 0.16% to $0.6890, with a slide in commodities weighing early on.

The Day Ahead:

For the EUR

Following a particularly busy economic calendar on Thursday, it’s a quiet day ahead with no material stats due out of the Eurozone.

With EU Parliamentary elections in full swing, the EUR will likely find direction from chatter from Brussels and EU member states.

Polls suggest an increase in the presence of the far-right in Brussels. It will all boil down to how badly the Establishment does.

One other consideration, however, will be the rise and fall of British Prime Minister Theresa May. Any suggestion of a no deal Brexit will likely influence the EUR as well as the Pound.

From elsewhere, U.S – China trade war chatter will continue to have an impact on the day. Trump’s Twitter account tends to become more active at the end of the week.

At the time of writing, the EUR was flat at $1.1181.

For the Pound

April retail sales figures are due out of the UK later this morning. Forecasts are Sterling negative. Direction through the day will continue to be hinged on political events in the UK and Brussels, however.

The UK has voted. Will Theresa May still be at number 10 come Monday?

At the time of writing, the Pound was up 0.03% to $1.2661.

Across the Pond

April durable core orders are due out of the U.S this afternoon. While forecasts are negative for the Greenback, the numbers could be overshadowed should there be any easing in trade tensions.

At the time of writing, the Dollar Spot Index was up 0.02% to 97.874.

For the Loonie

There are no material stats due out this afternoon, leaving the focus on market risk sentiment towards the Canadian and global economies.

The latest slide in oil prices will limit any upside on the day, even with another set of weak stats out of the U.S.

The Loonie was down 0.04% at C$1.3480, against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire

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