Sterling
The Pound was on strong form on Friday, after what markets considered to be a decent offer to EU citizens currently living in the UK on behalf of the government. Theresa May was in Brussels on Thursday evening, where she made her pitch over a dinner with EU officials. After debating it, the European Council President Donald Tusk torpedoed the offer on Friday, claiming it was below expectations. However, markets were largely unperturbed by this and Sterling kept rising into the weekend.
Bank of England (BoE) Governor Mark Carney will be speaking at today’s European Central Bank (ECB) Forum.
Euro
Positive economic data gave the Euro a boost on Friday. First-quarter French GDP figures were revised slightly higher to 0.5%, while job creation struck its highest level in almost a decade. While many of June’s PMIs had edged down slightly on the previous month’s scores, they still remained on strong form and showed that during the second quarter the Eurozone had seen its best private sector performance in six years.
As well as speeches from ECB President Mario Draghi, the German Ifo business confidence survey results will be released today.
US Dollar
The US Dollar was soft on Friday, as the markets were awaiting evening speeches from Federal Reserve officials. The odds of an interest rate hike before the end of the year were still below 50%, so there was little to get excited about. Odds remain stuck and USD is still weak after James Bullard suggested it was time to pause its cycle of interest rate hikes, even if Loretta Mester did state that more hikes were needed.
The US Dollar could weaken further this afternoon after the release of durable goods orders figures for May. The pace of decline is expected to slow, but a fall of -0.6% is hardly a positive result.
Canadian Dollar
The Canadian Dollar slumped on the back of weak inflation data on Friday. Consumer price growth was expected to slow from 0.4% to 0.2% in May, but instead dropped to 0.1%. This meant year-on-year growth fell to 1.3%, instead of weakening from 1.6% to 1.5% as predicted.
Australian Dollar
Thanks to the weakness of the US Dollar, the Australian Dollar saw strong gains due to rising appetite for risk on Friday. The calendar was devoid of domestic economic data to provide further support, but rising commodity prices helped improve demand for AUD even further. Iron ore was beginning to recover from its significant tumble recently, while copper prices leapt up to a two-month high.
New Zealand Dollar
The New Zealand Dollar was very much in the same position as the Australian Dollar at the end of last week. A lack of domestic data, but a weakening US Dollar and rising commodity prices, pushed the ‘Kiwi’ higher versus most of its peers, although NZD was stuck close to opening levels against the Pound and the Euro.
New Zealand’s trade balance data for May is expected to show that the surplus fell from NZ$578 million to NZ$419 million.
EUR ECB Forum in Sintra With Draghi, BOE’s Carney, BOJ’s Kuroda
EUR ECB’s Draghi and Former FRB Chair Bernanke Gives A Speech
08:00 EUR German IFO – Current Assessment (JUN)
08:30 GBP BBA Loans for House Purchase (MAY)
12:30 USD Durable Goods Orders (MAY P)
22:45 NZD Trade Balance (New Zealand dollars) (MAY)