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Aussie Dollar Soars as RBA Withholds Rate Cut, NZ Dollar Gains on Data

Aussie Dollar Soars as RBA Withholds Rate Cut, NZ Dollar Gains on Data

Ilya Spivak,

Talking Points:

  • Aussie Dollar Soars After RBA Unexpectedly Leaves Rates Unchanged
  • NZ Dollar Higher on Upbeat Commodity Exports, House Price Figures
  • British Pound May Not Find Support in Upbeat Construction PMI Data

The Australian Dollar outperformed in overnight trade, rising as much as 0.7 percent on average against its leading counterparts, after the RBA unexpected opted not to cut interest rates again at today’s monetary policy meeting. Economists were projecting a 25bps reduction while priced-in expectations reflected the implied probability of further easing at 60 percent. RBA Governor Glenn Stevens left the door open to future stimulus expansion however, saying the central bank will “assess the case for such action at forthcoming meetings”.

The New Zealand Dollar likewise advanced, finding support in upbeat economic news-flow. ANZ Commodity Price Index figures showed the price of the island nation’s raw-material exports jumped 1.8 percent in February, marking the largest increase since April 2013. That helped boost the outlook for the pivotal external sector, which accounts for close to 30 percent of GDP. Separately, the QV House Price gauge rose for a second consecutive month, posting the largest gain in five months. Meanwhile, the Yen traded higher as a drop on Japan’s benchmark Nikkei 225 stock index fueled demand for the safe-haven currency.

The economic calendar is relatively quiet in European trading hours. UK Construction PMI figures are expected to show the pace of homebuilding sector activity growth narrowly slowed in February. UK economic news-flow has outperformed relative to consensus forecasts over recent weeks, opening the door for an upside surprise. A similar outcome on the Manufacturing PMI print failed to drive the British Pound higher yesterday however, warning the currency may likewise look past today’s report. Elsewhere, the fourth-quarter Swiss GDP data is due to show output expanded 0.3 percent, marking a slowdown from the 0.6 percent expansion registered in the three months through September.

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Asia Session

GMTCCYEVENTACTEXPPREV
22:30AUDANZ Roy Morgan Weekly Consumer Conf112.5-110.8
23:00NZDQV House Prices (YoY) (FEB)6.4%-5.7%
23:50JPYMonetary Base (YoY) (FEB)36.7%-37.4%
23:50JPYMonetary Base - End of Period (¥) (FEB)278.9T-278.6T
23:50JPYLoans & Discounts Corp (YoY) (JAN)2.9%-3.1%
0:00NZDANZ Commodity Price (FEB)1.8%-1.0%
0:30AUDBoP Current Account Balance (4Q)-9.6B-11.0B-12.1B
0:30AUDNet Exports of GDP (4Q)0.70.60.8
0:30AUDBuilding Approvals (MoM) (JAN)7.9%-2.0%-2.8%
0:30AUDBuilding Approvals (YoY) (JAN)9.1%-1.7%9.6%
1:30JPYLabor Cash Earnings (YoY) (JAN)1.3%0.5%1.3%
1:30JPYReal Cash Earnings (YoY) (JAN)-1.5%--1.7%
3:30AUDRBA Interest Rate Decision 2.25%2.00%2.25%

European Session

GMTCCYEVENTEXPPREVIMPACT
6:45CHFGDP (QoQ) (4Q)0.3%0.6%Medium
6:45CHFGDP (YoY) (4Q)1.7%1.9%Medium
7:00EURGerman Retail Sales (MoM) (JAN)0.4%0.6%Low
7:00EURGerman Retail Sales (YoY) (JAN)3.0%4.8%Low
9:30GBPMarkit/CIPS UK Construction PMI (FEB)59.059.1Medium
10:00EURPPI (MoM) (JAN)-0.7%-1.0%Low
10:00EURPPI (YoY) (JAN)-3.0%-2.7%Low
10:00GBPBOE's Carney Speaks on FX Probe--Low

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EURUSD1.10331.11141.11491.11951.12301.12761.1357
GBPUSD1.51931.52911.53291.53891.54271.54871.5585

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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