G10 CURRENCY REPORT
The Dollar Index saw a steady climb higher last week and has risen to a fresh five-week high this morning at 96.73. Broad risk aversion provided support to the greenback as weaker-than-expected
data releases were largely ignored. Comments from Fed Chair Powell were also relatively mundane and went under the radar. Focus this week will be on the US-China trade negotiations plus the threat of another government shutdown. On the data front, we expect
a number of delayed releases to make an appearance while CPI figures are out on Wednesday.
The Euro softened last week with Eur/Usd touching a fresh two-week low this morning at 1.1315. Weaker-than-expected macro data has provided a weight of late and this culminated in
the EU Commission slashing growth forecasts for the region on Thursday, including Italy where GDP is expected to grow just +0.2% this year. Looking ahead, Euro Zone industrial production figures are out tomorrow, followed by Q4 GDP on Thursday and trade data
Gbp/Usd hit its lowest level in over two-weeks on Thursday at 1.2854 after the Bank of England voted 9-0 to leave the Bank Rate on hold at 0.75% and lowered growth forecasts. The
pound strengthened during the course of the press conference however as Governor Carney struck a more optimistic tone, providing a no-deal Brexit was avoided. Looking ahead, GDP, industrial production and trade figures are out later this morning ahead of CPI
on Wednesday and retail sales on Friday.
The Japanese Yen is weaker this morning with Usd/Jpy moving back towards the 110 level as futures point to a higher open on Europe and limit safe-haven demand. Looking ahead, Q4
GDP figures are out on Thursday followed by industrial production on Friday,
The Swiss Franc benefited from the risk aversion seen last week with Eur/Chf hitting a fresh two-week low on Friday at 1.1322. The pair did extend slightly below that level overnight
while there was little reaction to CPI data release in recent trade. Looking ahead, PPI data is expected on Thursday.
The Australian Dollar fell sharply last week with the bulk of declines coming on Wednesday in response to dovish remarks from RBA Governor Lowe who seemingly shifted to a neutral
stance. Aud/Usd continued to edged lower into the weekend and hit a fresh five-week low on Friday at 0.7060. Looking ahead, NAB confidence indicators and Westpac are out tomorrow while RBA Assistant Governor Kent speaks on Thursday.
NEW ZEALAND DOLLAR
The New Zealand Dollar fell sharply on Thursday in response to weaker-than-expected jobs data with Nzd/Usd extending to a two-week low on Friday at 0.6729. The downturn in risk sentiment
and lower oil prices also provided a weight as investors now look ahead pf the RBNZ policy decision on Wednesday.
The Canadian Dollar spent most of last week on the back foot, tracking declines in oil prices and weighed by broad risk aversion. Losses were cut on Friday however as Usd/Cad pulled
back from a two-week high after Canadian jobs data came in better-than-expected. Looking ahead, manufacturing sales and new house price data are out tomorrow.
The Swedish Krona softened last week with Eur/Sek rising to a four-month peak on Friday at 10.5165. Investors have become wary of a dovish surprise by the Riksbank on Wednesday after
a string of weaker-than-expected data releases, including household consumption and service PMI last week. Riksbank Deputy Governor Jansson also warned that they would need to go slowly in terms of rate hikes.
The Norwegian Krone has kicked of the trading week on the back foot with Eur/Nok rising to a fresh four-week high of 9.8194 in recent trade after CPI data surprised to the downside.
Looking ahead, data releases are sparse this week with only trade figures due for release on Friday.