Markets

UK Retail Sales and the GBP in Focus as the Dollar Slide Continues

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Earlier in the Day:

Economic data through the Asian session this morning was limited to New Zealand's Business PMI numbers for January.

There was more good news for the Kiwi Dollar bulls, with the PMI rising from 51.2 to 55.6 in January.

The New Orders sub-index rebounded from a contracting 49.7 in December to 55.6 in January, with Deliveries also expanding, up from 49.8 to 55.3, with production, employment and finished stocks seeing greater expansion in the month, contributing to the bounce back in the PMI sector.

While the PMI number was positive, the proportion of positive comments from manufacturers slid from 63.3% to 50.7% in January, painting a slightly different picture to the PMI numbers, raising some concerns over what lies ahead for the sector.

The Kiwi Dollar moved from $0.74014 to $0.74065 upon release of the PMI, before moving to $0.7423, a 0.22% gain for the morning.

Elsewhere, the Aussie Dollar continued to move ahead, up 0.31% to $0.797, while the Yen recovered from early losses to gain 0.33% to ¥105.78 against the Dollar, as U.S Dollar continued its slide through the Asian session.

In the equity markets, the bounce in the Yen did little to pull back Japanese equities, with the Nikkei up 1.22% at the time of writing, while the ASX200 slipped 0.09% in light trading, with the a number of key Asian markets closed for Chinese New Year.

The Day Ahead:

For the EUR, there are no material stats scheduled for release through today's session, which will turn attention to ECB member commentary, with ECB's Coeure scheduled to speak this morning.

Economic data out of the Eurozone has continued to support a positive outlook for the Eurozone economy, with the narrowing of the Eurozone's trade surplus with the rest of the world in December offset by intra-euro area trade according to figures released on Thursday.

At the time of writing, the EUR was up 0.32% to $1.2546, with upbeat economic data out of the Eurozone, coupled with a stumbling Dollar driving the EUR through the week.

Across the Channel, January retail sales figures are scheduled for release out of the UK. Forecasts are for a recovery from the woeful December numbers that would be a positive for the Pound and provide further reason for the BoE to make a sooner rather than later rate hike, though next month's negotiations on Britain's transition period out of the EU will be key.

At the time of writing, the Pound was up 0.26% to $1.4135, the recovery coming from a particularly soft Dollar and a surprisingly hawkish BoE Governor, with the lack of Brexit talks easing any angst ahead of next month's negotiations.

Across the Pond, it's another heavy day of stats out of the U.S, with January housing sector data, import and export price figures and February's prelim consumer sentiment numbers scheduled for release.

Following another slide in the Dollar in the U.S session that has continued through the Asian session this morning, economic data and sentiment towards monetary policy continues to have a muted impact on the Dollar and, barring exceptional figures this afternoon, a bounce back from today's losses looks unlikely.

At the time of writing, the Dollar Spot Index was down 0.33% to 88.303, with little in the way of support as focus remains on the U.S deficits.

For the Loonie, stats include December's manufacturing sales and foreign security purchases, with the numbers forecasted to be fairly neutral for the Loonie, though further gains could be on the cards later today should the Dollar tumble continue through to the close.

At the time of writing, the Loonie was up 0.13% to C$1.2465.

This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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