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US GDP Climbs as Canadian Inflation Falls

22 December 2016 by News Desk

The Australian dollar fell against the US dollar (AUD/USD) while registering gains against the Canadian dollar (AUD/CAD) following a mixed bag of data during Thursday’s North American trading, say currency experts FC Exchange.

AUD Exchange Rate Fluctuates on Commodities

The Australian dollar has been fluctuating on account of commodity prices and global developments in a very quiet end to the week for Australian ecostats. The period between Christmas and New Year will also be quiet on the domestic data front with only Australia’s private sector credit numbers due out on Friday 30th December. However, 1st January will see the release of China’s NBS manufacturing and non-manufacturing purchasing manager’s indexes (PMI’s), which may allow the Aussie some movement as China is the nation’s largest trading partner. Tuesday 3rd January will kick-start Australian data in 2017 with the release of the AIG manufacturing index. In the interim, the Aussie is likely to fluctuate as a result of commodity prices, global developments, and risk sentiment.

NZD Exchange Rate Picks up with Support from GDP Stats

The New Zealand dollar exchange rate gathered momentum against currency majors on Thursday following the NZ gross domestic product (GDP) data release. The quarter-on-quarter figure registered 1.1% growth in Q3 rather than the 0.8% economists were expecting. Meanwhile, the year-on-year stat failed to meet the 3.6% forecast, coming in at 3.5%, after the previous quarter’s expansion was revised lower. The increase in growth in Q3 has been attributed to a surge in household spending as well as a building boom. Gary Dunnet of Statistics New Zealand said: ‘This quarter’s rise points to broad-based growth. Thirteen of the 16 industries were up, with the main weakness coming from agriculture.’

GBP Trending Lower – UK Consumer Confidence Improves Slightly

The December GfK consumer confidence index increased by one point to reach -7 in Thursday’s European trading. At the start of the year, the index had resided at +4; however, following the EU referendum in June, July’s consumer confidence index plunged sharply to -12. Joe Staton, Head of Market Dynamics at GfK said: ‘While consumers remain relatively confident about their personal financial situation, confidence in the general economic situation for the UK has collapsed in the face of uncertainty about the future both at home and abroad.’

USD/AUD Climbs Despite US Data Surprises

The US dollar to Australian dollar (USD/AUD) exchange rate was able to climb in Thursday’s North American session despite the US durable goods orders figure registering a -4.6% contraction in November. The ecostat fell short of economist’s -4.8% forecast. The -4.6% reading has been accredited to a fall in aircraft orders with civilian aircraft orders registering a massive 73.5% decline from the previous month. Orders for transportation equipment has reached its sharpest rate of decline in two years, falling by 13.2%.

However, US gross domestic product (GDP) data was revised up to 3.5% from 3.2% in the third quarter of 2016 as a result of stronger consuming spending, and marks the best performance in the latter two years. Meanwhile, US personal consumption expenditure year-on-year marked a decline from a positively revised 1.8% in October, to 1.6% in November – an event which may temporarily dent the buck’s momentum.

EUR Supported by ECB Economic Bulletin

The European Central Bank (ECB) announced it expects Eurozone inflation to reach in excess of 1.0% at the start of 2017 – a development that would mark the highest level of inflation since late 2013. Furthermore, the ECB’s Economic Bulletin released in Thursday’s European trading suggests that global growth is increasing in momentum. The ECB stated: ‘The medium-term outlook for global activity remains one of strengthening growth, albeit below it’s pre-crisis pace. Overall, growth appears to be holding up in advanced economies and seems to have bottomed out in emerging market economies.’

The euro may experience some movement in Friday’s session with the release of the German GfK consumer confidence survey; however, geopolitical tensions are currently dominating a lot of the single currency’s market movement in the run up to Christmas.

CAD Weakens as Inflation Sinks

The Canadian dollar didn’t fare well in the market during Thursday’s trading after Canadian inflation fell below forecasts. Year-on-year, November’s Canadian consumer price index (CPI) came in at 1.2%, a tumble from the previous month’s 1.5% and the forecast 1.4%. The fall has been attributed to lower food costs. Meanwhile, Canadian retail sales were able to jump by 1.1% in October, much higher than the 0.3% expected.

 

Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.

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