Yahoo Finance The Kiwi Spikes, with Focus Shifting to Retail Sales and the Pound
Earlier in the Day:
Economic data released through the Asian session was on the lighter side this morning, with key stats limited to 2nd quarter GDP numbers out of New Zealand.
For the Kiwi Dollar, the economy grew by 1% quarter-on-quarter in the 2nd quarter, coming in well ahead of a forecasted 0.7% and the 1st quarter’s 0.5%. Year-on-year, the economy grew by 2.8%, accelerating from a 1st quarter 2.6%, while also coming in ahead of a forecasted 2.5%.
The quarter-on-quarter rise was the largest in 2-years, growth broad based as 15 of 16 industries recorded higher production, mining the only industry to see a decline according to NZ Stats.
Services led growth, with all industries seeing a pickup in production, leading to 1% growth, while the agriculture sector had the largest single industry contribution, up 4.2%.
Retail trade and accommodation, wholesale and transport industries all improved, supported by rising household spending.
The quarter’s blemish came from the mining sector, which saw a 20% slide, the largest fall in 29-years.
The Kiwi Dollar moved from $0.66092 to $0.66336 upon release of the figures, before rising to $0.6651 at the time of writing, up 0.53% for the session, the markets needing to reconsider current sentiment towards RBNZ policy.
Elsewhere, a pullback in the Dollar through the early part of the day supported the Japanese Yen, which was up 0.12% to ¥112.14 against the Dollar, while the Aussie Dollar was down by just 0.03% to $0.7261, some consolidation to be expected following the first half of the week’s 1.5% rally back to $0.72 levels.
In the equity markets, it was a mixed start to the day, the Nikkei giving up early gains to sit flat, limited by an uptick in the Yen, with the Hang Seng and CSI300 up 0.48% and 0.19% respectively, a shift in sentiment towards trade providing further support, while the ASX200 saw red, down 0.18% at the time of writing.
For the CSI300 and Hang Seng, tech stocks and a bounce back in the financial sector provided support early on, AAC Technologies and Tencent the biggest risers on the Hang Seng at the time of writing, up 1.32% and 1.24% respectively.
The Day Ahead:
For the EUR, it’s another particularly quiet day, with no material stats scheduled for release through the day to provide direction.
A shift in sentiment towards trade, supported by upbeat economic indicators and on hopes of trade talks resuming to end the trade war before the end of the year, eased demand for the Dollar, supporting the upward movement in the EUR through the week.
We will expect sentiment towards trade and anticipated impact on the Eurozone economy to continue to be the near-term driver, the EU still on Trump’s trade war hit list.
At the time of writing, the EUR was up 0.11% to $1.1686, with trade chatter in focus through the day.
For the Pound, economic data scheduled for release later this morning includes August retail sales figures that will again provide direction, forecasts being negative, though again, we will expect any positive numbers to have a short lived impact on the Pound, with Brexit news to continue to be the key driver.
At the time of writing, the Pound was up 0.08% to $1.3154, with retail sales and Brexit the drivers for the day.
Across the Pond, economic data scheduled for release from the U.S includes the weekly jobless claims, August existing home sales and September’s Philly FED manufacturing index numbers.
Barring an unexpected jump in initial jobless claims, focus will be on the manufacturing numbers, which are forecasted to be Dollar positive, upbeat economic indicators continuing to support the probability of a September and December rate hike by the FED.
Outside of the numbers, the Oval Office will have its usual influences on the Dollar, with NAFTA expected to be the administration’s main area of focus, though there could always be a tweet in response to China’s measured and targeted response to fresh U.S tariffs.
At the time of writing, the Dollar Spot Index was down 0.06% to 94.478, with direction in the hands of Trump and manufacturing PMI numbers through the day.
For the Loonie, there are no material stats scheduled for release through the day, leaving the Loonie in the hands of NAFTA, with hopes of a conclusion to talks by the end of the week diminishing to raise the possibility of tariffs. Talks are expected to resume today, with progress needed to provide the Loonie with support through the U.S session.
At the time of writing, the Loonie was up 0.09% to C$1.2916 against the U.S Dollar.
This article was originally posted on FX Empire
