Talking Points:
Australian Dollar Soft on Dovish RBA, Profit-Taking in Asian Trade
Quiet European Data Docket Unlikely to Drive FX Market Volatility
Euro, Franc and Kiwi Dollar May Rise on Corrective Profit-Taking
The Australian Dollar underperformed in otherwise quiet overnight trade. The currency began the session in corrective having scored impressive gains yesterday following better-than-expected employment figures. The decline was amplified by the release of a dovish-sounding RBA Monetary Policy Statement. The central bank lowered its GDP and inflation forecasts and poured cold water on interest rate hike bets, saying accommodative policy is likely to be appropriate “for some time”.
The economic calendar is relatively quiet in European trading hours. UK Industrial Production figures are expected to show output fell for the first time in four months in March but the outcome is unlikely to mean much for the British Pound beyond reinforcing the amply priced-in standstill on the BOE policy front. Meanwhile, the German Trade Balance report will probably pass with little fanfare as traders’ top concern remains the possibility of ECB intervention following yesterday’s ominous policy announcement.
The US data docket is likewise thin, opening the door for a consolidative tone into the final hours of the trading week. That may produce a round of corrective profit-taking as markets digest the latest burst of volatility. The Aussie and the Japanese Yen may find themselves on the defensive in such a scenario, while the previously beleaguered Euro, Swiss Franc and New Zealand Dollar squeeze out a bit of upside momentum.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
22:45
NZD
Card Spending Retail (MoM) (APR)
0.3%
0.6%
0.0%
22:45
NZD
Card Spending Total (MoM) (APR)
-0.4%
–
-0.2%
23:50
JPY
Official Reserve Assets (APR)
$1282.8B
–
$1279.3B
1:30
CNY
PPI (YoY) (APR)
-2.0%
-1.9%
-2.3%
1:30
CNY
CPI (YoY) (APR)
1.8%
2.1%
2.4%
1:30
AUD
RBA Statement on Monetary Policy
–
–
–
5:00
JPY
Leading Index (MAR P)
106.7
108.9
5:00
JPY
Coincident Index (MAR P)
114.0
113.0
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
6:00
EUR
German Trade Balance (€) (MAR)
17.4B
16.3B
Medium
6:00
EUR
German Current Account (€) (MAR)
14.9B
13.9B
Medium
6:00
EUR
German Exports s.a. (MoM) (MAR)
1.3%
-1.4%
Low
6:00
EUR
German Imports s.a. (MoM) (MAR)
0.6%
0.4%
Low
8:30
GBP
Manufacturing Production (MoM) (MAR)
0.3%
1.0%
Medium
8:30
GBP
Manufacturing Production (YoY) (MAR)
2.9%
3.8%
Medium
8:30
GBP
Industrial Production (MoM) (MAR)
-0.2%
0.9%
Medium
8:30
GBP
Industrial Production (YoY) (MAR)
2.4%
2.7%
Medium
8:30
GBP
Construction Output s.a. (MoM) (MAR)
0.6%
-2.8%
Low
8:30
GBP
Construction Output s.a. (YoY) (MAR)
7.1%
2.8%
Low
8:30
GBP
Visible Trade Balance (£) (MAR)
-9000M
-9094M
Low
8:30
GBP
Trade Balance – Non EU (£) (MAR)
-3000M
-2919M
Low
8:30
GBP
Total Trade Balance (£) (MAR)
-2000M
-2058M
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EUR/USD
1.3569
1.3729
1.3784
1.3889
1.3944
1.4049
1.4209
GBP/USD
1.6842
1.6893
1.6913
1.6944
1.6964
1.6995
1.7046
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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Source: Daily fx