A quiet day for currencies – 23rd March 2017
A quiet day for currencies – 23rd March 2017
After Tuesday’s burst of activity on the currency markets, Wednesday was a day when investors sat-back, took stock and sought some inspiration while the currencies seemed to do the same. There was also nothing useful among Wednesday’s economic statistics for investors to get their teeth into. The Canadian Dollar strengthened by half a cent against Sterling and the Euro was a quarter of a cent lower. Sterling lost seven ticks to the Swiss Franc and 11 to the NZ Dollar which equated to a 0.1% loss. The Reserve Bank of New Zealand’s decision to keep interest rates on hold was as anticlimactic as it had been expected to be.
The lack of ecostats from the major economies led to more attention being paid to the data from South Africa, which were not bad. CPI inflation slowed from 6.6% to 6.3% while core inflation, excluding food and energy, was down to 5.2%. The current account deficit shrank to 1.7% of gross domestic product in Q4 and the balance of trade moved into surplus. The pace of US existing (second hand) home sales slowed by -3.7% in February and oil stocks were up by nearly 5m barrels in the week to 17 March.
Today’s two big events are a speech by Federal Reserve chairperson Janet Yellen and, much later, the House of Representatives’ vote on Mr Trump’s health care bill. From a domestic perspective the focus will be on the UK retail sales figures for February.
Analysts expect retail sales to have risen by a monthly 0.4%, counteracting January’s -0.3% decline. That would equate to an annual increase of 2.6%, although the CBI’s Distributive Trades Survey, which comes out an hour and a half later, could well show a higher figure.
Ms Yellen will not be the only Fed boss speaking today: perma-dove Neel Kashkari will be spreading his no-hurry message this evening and, later on, Dallas’s hawkish Robert Kaplan will doubtless be talking of further increases. Tonight New Zealand reports on February’s balance of trade and tomorrow brings the ever-exciting US durable goods orders figure.