Today’s Highlights
- Sterling steady in data void
- Aussie Dollar weaker as retail sales drop
- No change expected from Reserve Bank of New Zealand
Current Market Overview
The Sterling-Euro exchange rate is a tad higher this morning after a lacklustre Monday. Sterling did gain half a cent or so against the Euro after The British Retail Consortium posted a strong 5.6% year-on-year gain in April’s retail sales after a drop of 1.0% in March. It is unlikely the Pound will make further gains today as the data diary lacks anything UK related. Traders may twitch on rumours and speculation ahead of Thursday’s Bank of England meeting, but that is about all.
For its part, the Euro is weakened by poor German industrial output figures. The data was better than expected but still showed a decline of 0.4% in March. EU data today is of a minor nature; i.e. nothing that is likely to significantly shift the Euro. Traders will be interested in tomorrow’s speech by European Central Bank (ECB) President, Mario Draghi, though. His speech about monetary policy may yield hints as to when the ECB is going to be seeking rate hikes.
Overnight news from Australia showed a fall in March’s retail sales. Slack wage growth and a soft labour market are being cited as the reasons for the 0.1% decline from the month earlier and the fact that retail sales only gained 0.1% in the first quarter of the year. The Reserve Bank of Australia is caught between these poor stats and fears over regional variations in house price rises. As such, no change is expected in Aussie interest rates any time soon. The Aussie Dollar weakened against the Pound for the sixth day in a row.
Overnight tonight we get the interest rate decision from the Reserve Bank of New Zealand (RBNZ) and, whilst no change is expected, we will be interested to see how the RBNZ sees the recent bout of NZD weakness affecting their decision making. Central banks always say they don’t concentrate on the exchange rate, but of course they do. A weak NZD is very welcome for exports, but hampers their attempts to manage inflation. There will be NZ retail data released tonight, so a volatile NZD is likely overnight.
And I have to dash now, because I am off to buy some Nordstrom jeans. They are SO ‘this year’. They come with actual caked on mud and grime and they’re only $425 a pair. They are a must have for the budding Z list celebrity with gullible tattooed on their botoxed foreheads.
