Loonie at a 2-week high

Key Movers

CPI data released at 0.2%, which missed expectations of 0.3% this morning. Unemployment claims printed at 204K versus expectations of 210K. The US Dollar Index (DXY) dropped touching the 94.43 mark. No hard headlines regarding trade today, but it seems like China is open and willing to defuse any trade tensions with the US despite Trump’s harsh tariff threats on $200B of Chinese imports. The USD is currently trading 0.5% lower across most of its G10 peers. Tomorrow we will have m/m Retail Sales at 8:30AM EST.


The EUR is trading higher this morning in the North American trading session. The ECB held interest rate and QE unchanged as widely expected. The Governing Council expects the ECB to hold interest rate unchanged at least through the summer of 2019. EUR/USD gets a further boost higher after US core inflation also missed target this morning.


The Sterling is on firmer ground after Bank of England voted to leave rates unchanged at 0.75% as expected. A unanimous vote of 9-0 in favor of no change highlights the financial market uncertainty regarding Brexit. Economists polled by Reuters are expecting no change in interest rates until after the departure of Britain in the EU. Governor Carney will be speaking tomorrow morning in Dublin.


The Australian dollar traded within a tight range for much of Wednesday’s Asian session, with little to drive direction on the economic calendar. However, sentiment quickly shifted later in the day on reports that US Treasury Secretary Steve Mnuchin has invited China to attend trade talks.

Australian employment data, released overnight, also printed better than expected. Headline employment change printed better than expected at +44k vs. and expected +18.0. Unemployment came in at 5.3%m as forecasted.


The NZD benefitted from USD weakness overnight as the USD fell sharply during the US session as positive news on the trade front filtered through to markets. NZD/USD jumped from 0.6503 in early London trade to touch highs of 0.6566 representing a near 0.5% advance on the day.

For the remainder of the week, we have NZ Manufacturing Index numbers, to be released overnight. Next week we have quarterly NZ GDP numbers.