The Dollar’s on the Move, with Economic Data Likely to Add Further Pressure on Riskier Assets

Bob Mason
5 min read
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In this article:

Earlier in the Day:

It was a relatively busy start to the day on the economic calendar, with the Aussie Dollar and the Pound in action.

Outside of the numbers, COVID-19 numbers from the first half had limited influence as market sentiment towards the economic outlook continued to weigh.

On Wednesday, the total number of coronavirus cases across France, Germany, Italy, and Spain rose by 13,354 to 625,415. On Tuesday, the number of new cases had risen by 15,595 to 612,061

In the U.S, the total number of cases increased by 29,622 to 643,508, taking the total number of cases globally to 2,078,016. On Tuesday, the U.S had reported 27,509 new cases.

For the Aussie Dollar

March employment figures were in focus through the early part of the day. Total employment increased by 5,900, which was far better than a forecasted 35,000 fall. Full employment fell by 400, however, with the unemployment rate rising from 5.1% to 5.2%.

According to the ABS,

  • The total number of people in full-time employment fell by 400, while people in part-time employment increased by 6,400.

  • Since March 2019, full-time employment increased by 91,700 people, while part-time employment increased by 136,000 people.

  • The employment to population ratio fell by 0.1 pts to 62.5% in March 2020, while up by 0.1 pts since March 2019.

  • While the unemployment rate increased from 5.1% to 5.2%, the participation rate held steady at 66.0%.

It is worth noting that the ABS did point out that the numbers were taken from early March when the full effect of COVID-19 had yet to be felt. April numbers, therefore, will likely paint a very different picture.

The Aussie Dollar moved from $0.62822 to $0.63095 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.59% to $0.6282.

Elsewhere

The Japanese Yen was down by 0.36% to ¥107.85 against the U.S Dollar, while the Kiwi Dollar was down by 0.73% to $0.5947.

The Day Ahead:

For the EUR

Its a relatively quiet day ahead on the economic calendar. Key stats due out include finalized March inflation figures out of German. February industrial production figures for the Eurozone are also due out later in the session.

We would expect the numbers to have a muted impact on the EUR, however.

Market sentiment towards the Eurozone’s economic outlook will likely continue to pressure the EUR. The failure of member states to deliver a more sizeable stimulus package would also be EUR negative.

At the time of writing, the EUR was down 0.25% at $1.0883.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. In the early hours of this morning, March retail sales figures provided direction ahead of the BoE’s Credit Conditions Survey.

According to the BRC, the Retail Sales Monitor fell by 3.5% in March, year-on-year, following a 0.4% decline in February.

The Pound moved from $1.25218 to $1.25180 upon release of the figures that preceded the Credit Conditions Survey.

With the BoE Survey to consider later this morning, expect the latest COVID-19 numbers to have less influence.

At the time of writing, the Pound was down by 0.25% to $1.2487, with risk aversion weighing early on.

Across the Pond

It’s another busy day ahead on the U.S economic calendar. Key stats include the Philly FED Manufacturing Index for April and the weekly jobless claims figures.

Expect both to garner plenty of attention.

From the housing sector, March building permits and housing stats may yet to reflect any market shift in constructor confidence…

Outside of the numbers, there’s been some confusion on whether some U.S States will be in a position to open for business without Trump’s consent. Expect chatter and the latest COVID-19 numbers to also influence. With economic doom and gloom gripping the markets, however, the Dollar is likely to continue to find support.

The Dollar Spot Index was up by 0.35% to 99.812 at the time of writing.

For the Loonie

It’s a relatively quiet day on the economic calendar, with February’s manufacturing sales figures due out later today.

The February numbers are unlikely to have a material impact on the Loonie, leaving the Loonie in the hands of OPEC’s monthly report.

We’ve seen crude oil prices take another tumble this week. While the Loonie has avoided a return to C$1.42, however, risk aversion on the day and another pullback in crude oil prices will weigh…

The Loonie was down by 0.06% at C$1.4123 against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire

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