- Australian GDP Ahead – Results set to impact AUD.
- Pound slips on McDonnell Brexit warning – Gloomy PMI figures also weigh.
- EUR benefits as Eurozone retail sales rebound – ECB concerns likely to limit the Euro’s gains however.
- USD stronger after US PMI figures – US service sector growth strikes a three-month high.
How Will the Australian Dollar (AUD) React to GDP?
The Australian Dollar was trading in a fairly narrow range against the Pound and was down against the US Dollar ahead of the release of Australia’s latest GDP data.
The report is expected to show that quarterly output improved from 0.3% to 0.5% in Q4 of 2018, quarter-on-quarter, but that growth eased from 2.8% to 2.7% year-on-year.
While a better-than-expected growth reading could support AUD, any signs of slowing output could weigh on the Australian Dollar.
Pound Sterling (GBP) Slips on McDonnell Brexit Deal Warning
The Pound (GBP) stumbled on Tuesday as it was hit by a bout of profit taking after the Labour party’s John McDonnell said that Labour MPs would not back Theresa May’s withdrawal deal.
This followed the release of the UK’s latest Services PMI earlier in the session, where a rise in the headline figure failed to mask underlying weakness in the sector and the drop in staff levels.
Looking ahead, the focus is likely to remain on Brexit through the second half of this week’s session amid a lull in notable UK data.
EUR Benefits from Eurozone Retail Sales Rebound
A stronger-than-expected rebound in Eurozone retail sales growth in January lent the Euro support during the European session.
Eurostat reported that sales growth rocketed from -1.4% to 1.3% at the start of 2019 as consumer confidence picked back up thanks to falling employment and rising wages.
However any further upside in the Euro is likely to be limited, with EUR investors expected to remain wary ahead of the European Central Bank’s (ECB) rate decision later in the week.
USD Exchange Rates Rise as US Service Sector Impresses
The US Dollar broadly strengthened during yesterday’s European session as the latest US services PMI impressed.
According to the ISM non-manufacturing index, the US service sector enjoyed a notable pick-up in activity last month, with growth striking a three-month high following a jump in employment and new orders.
The next market-moving US data will be the release of the latest ADP employment figures, with USD investors looking out for any hints on how US payrolls may have fared in February.
Canadian Dollar Muted Ahead of BoC Rate Decision
The Canadian Dollar was putting on a muted performance ahead of the upcoming Bank of Canada’s (BoC) rate decision.
While no policy changes are expected from the bank, analysts are forecasting that the BoC will adopt a more cautious tone in light of weak domestic growth and a stuttering global economy.
NZD Exchange Rate Softens as USD Rises
The New Zealand Dollar was left trending in a weaker position against its rivals after the US Dollar responded positively to the latest US services report.
With no influential NZ data on the cards, further ‘Kiwi’ movement is likely to be the result of general market risk appetite.
Wednesday 6th March
11:30 AUD Gross Domestic Product
19:30 EUR Markit German Construction PMI
23:15 GBP BoE Cunliffe Speech
Wednesday 7th March
00:30 USD Trade Balance
02:00 CAD Bank of Canada Rate Decision
Post by TorFX