Economic Data Puts the EUR, the GBP and the U.S Dollar in the Spotlight

Earlier in the Day:

It was a relatively busy day on the Asian economic calendar this morning. The Aussie Dollar and Kiwi Dollar were in action through the early part of the day.

Later today the PBoC will also be the spotlight.

For the Kiwi Dollar

4^th quarter wholesale inflation figures were in focus at the start of the day. The producer price input price index rose by 0.1% in the 4^th quarter. Economists had forecast a 0.4% rise. In the 3^rd quarter, the index had risen by 0.9%.

According to NZ Stats,

• Farm expenses (excl. livestock) stalled in the 4^th quarter, following a 0.8% rise in the 3^rd

• Inputs were up by just 0.3% from the 4^th quarter of 2018, softening from 2.1% in the 3^rd

The Kiwi Dollar moved from $0.63871 to $0.63851 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.42% to $0.6359.

For the Aussie Dollar

Employment rose by 13.5k in January, following a 28.9K rise in December. Economists had forecast a 10k rise.

According to the ABS,

• The total number of people in full-time employment increased by 46,200, while people in part-time employment slid by 32.700.

• Since January 2019, full-time employment increased by 143,800 people, while part-time employment increased by 103,500 people.

• The employment to population ratio held steady at 62.6% in December 2019 and was up by 0.2 pts since January 2019.

• The unemployment rate crept up from 5.1% to 5.3%, however, as the participation rate rose by 1 point to 66.1%.

The Aussie Dollar moved from $0.66911 to $0.66797 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.46% to $0.6644.

On the Monetary Policy front

The PBoC is scheduled to deliver its loan prime rates for February. Expectations are for the PBoC to cut 1-year loan prime rates from 4.15% to 3.95% and to cut 5-year loan prime rates cut from 4.80% to 4.65%.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.07% to ¥111.29 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Key stats include German consumer confidence and Eurozone consumer confidence figures.

Wholesale inflation figures out of Germany and finalized inflation figures for January are due out France.

Barring particularly dire inflation numbers, we expect German and Eurozone consumer confidence figures to be the key drivers.

Concerns over the spread of COVID-19 and impact on the global economy will likely weigh on the confidence figures. With the manufacturing sector in the doldrums, consumer spending will be all the more important through the 1^st quarter to support growth.

Outside of the numbers, monetary policy divergence will continue to go against the EUR near-term, following the FOMC meeting minutes overnight.

As the markets respond further to the FOMC meeting minutes, the ECB monetary policy meeting minutes, due out later today, will also garner interest.

At the time of writing, the EUR was down by 0.06% at $1.0799.

For the Pound

It’s another relatively busy day ahead on the economic calendar. Key stats include January retail sales figures due out later this morning.

Expect today’s figures to have a material impact on the Pound and sentiment towards BoE monetary policy.

While numbers will provide direction, there’s always Brexit chatter to offset the effects of any positive numbers.

Trade negotiations between Britain and the EU are due to start in March and the EU is already talking tough…

At the time of writing, the Pound was down by 0.04% to $1.2915.

Across the Pond

It’s a relatively busy day ahead on the U.S economic calendar. Key stats include the weekly jobless claims and the Philly FED Manufacturing Index figures for February.

Barring a jump in initial jobless claims beyond 220k, the focus will be on the Philly FED figures. Forecasts are Dollar negative.

At the time of writing, the Dollar Spot Index was down by 0.07% to 99.635.

For the Loonie

It’s a relatively quiet day ahead on the economic calendar, with January new housing price index figures due out of Canada.

We would expect the numbers to have a muted impact on the Loonie, however. The focus will remain on updates from China and risk appetite on the day.

The Loonie was down by 0.04% at C$1.3226 against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire

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