Record High Exports Lift New Zealand Dollar

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  • AUD Exchange Rates Recover in spite of Weaker Producer Price Index – Odds of RBA interest rate cut largely priced into Australian Dollar
  • New Zealand Dollar Jumps as Trade Surplus Swells – New Zealand exports rise to record high
  • Nine-Month High in UK Mortgage Approvals Offers Limited Pound Support – Brexit uncertainty continues to cloud domestic outlook
  • US Dollar Unable to Capitalise on Strong Annualised GDP Data – Higher headline growth fails to boost USD exchange rates

Underwhelming Producer Prices Fail to Dent Australian Dollar
Friday’s disappointing Australian producer price index data failed to drive AUD exchange rates to any fresh losses, even though this offered fresh signs of easing inflation.

With higher odds of a Reserve Bank of Australia (RBA) interest rate cut already largely priced into the Australian Dollar its downside potential was limited. A surprise improvement in the first quarter export price index also offered some support to AUD exchange rates ahead of the weekend.
A weaker sense of market risk appetite could still see the Australian Dollar losing ground today, however.
Pound Muted even as Mortgage Approvals Hit Nine-Month High
Although UK mortgage approvals jumped to an unexpected nine-month high in March the impact on GBP exchange rates proved limited.

Investors failed to take any particular encouragement from the data, in spite of signs pointing towards a resurgence in household confidence.

As the second quarter CBI industrial trends orders index saw a surprise slump from 1 to -5 this prompted fresh anxiety over the outlook of the UK economy.
Signs of progress in talks between the Labour leadership and Theresa May could help to support the Pound, provided markets see hope of a Brexit compromise.
Spanish Election Worries Keep Euro on Back Foot
Mounting anxiety ahead of Sunday’s Spanish general election saw the Euro struggling to find any particular momentum during Friday’s European session.

With markets wary of the prospect of fresh political upheaval within the Eurozone the mood towards the single currency remained generally bearish.

Even though the US Dollar fell somewhat out of favour this was not enough to shore up EUR exchange rates at this stage.
Tonight’s Eurozone business confidence index could offer EUR exchange rates a boost, with investors anticipating a modest uptick on the month.
Higher GDP Fails to Encourage US Dollar Gains
Markets were caught off guard after the annualised first quarter US gross domestic product surged past forecasts to clock in at 3.2%.

This unexpectedly strong headline reading failed to offer a lift to the US Dollar, however, as the underlying details of the growth report proved less encouraging.

With investors anticipating a weaker second quarter reading USD exchange rates were left on the back foot heading into the weekend.
Any uptick in tonight’s personal consumption expenditure core data could offer the US Dollar a rallying point, though.
Sharp Decline in Oil Price Weighs on Canadian Dollar
The appeal of the Canadian Dollar remained limited on Friday as investors continued to adjust to the Bank of Canada’s (BOC) neutral policy outlook.

A sharp decline in oil prices saw CAD exchange rates come under additional pressure, with Brent crude falling -3% on the day’s opening levels. This saw the oil market reversing much of the week’s bullish gains, with concerns over global supply persisting.
Unless the oil market stages a recovery CAD exchange rates are likely to maintain their downtrend today.
Large Trade Surplus Buoys New Zealand Dollar
An unexpectedly sharp widening of the New Zealand trade surplus saw NZD exchange rates boosted ahead of the weekend.

In a positive development for the domestic economy export volumes rose to a record high of 5.7 billion, suggesting that the impact of global trade tensions has faded.

A solid improvement in the latest ANZ consumer confidence index also helped to shore up the New Zealand Dollar.
However, NZD exchange rates may struggle to hold onto their gains over the course of the day as the impact of the positive trade data fades.

Data Releases

April 29th 19:00 EUR Eurozone Business Confidence (APR) 
April 29th 22:30 USD Personal Consumption Expenditure Core (YoY) (MAR)

Post by TorFX

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