US data keeps on keeping on
The US dollar had another solid session overnight as US economic data defied worries and stayed strong.
Chiefly, the final read of March-quarter GDP was much better than forecast, up 2.0% in annualised terms versus forecasts for 1.4%.
Weekly unemployment claims also unexpectedly dropped, falling from 264k to 239k.
The overnight news continues a recent run of stronger US economic data.
For example, the difference in frequencies between good news from the US and good news from Europe has reached the largest disparity since 2003.
So far, this hasn’t significantly impacted the EUR/USD, with markets mainly focused on short-term interest rate expectations instead. The market expects two more hikes from the European Central Bank this year.
Greenback stronger across Asia
Across markets, the US dollar was stronger versus most other currencies.
The NZD/USD fell 0.1% while the USD/CNH gained 0.4%.
The USD/SGD gained 0.3% as it reached the highest level of the year.
However, the Australian dollar outperformed, bouncing after a two-week period of heavy selling. The AUD/USD gained 0.3%. The Aussie was stronger in other markets with the AUD/EUR up 0.7% and the AUD/JPY up 0.5%.
US PCE key
Tonight, all eyes are on the US’s personal consumer and expenditure numbers.
Earlier this week, Federal Reserve chair Jerome Powell said he would not rule out consecutive rate hikes at the Fed’s July and September meetings.
While headline inflation has fallen sharply, core inflation, such as that seen in the US’s PCE numbers, remains stubbornly high, causing headaches for central bankers.
Eurozone inflation figures are also due tonight, with headline inflation expected to fall from 6.1% to 5.6%, but core inflation forecast to climb from 5.3% to 5.5%.
Otherwise, markets will also be looking to China, with purchasing managers indexes due for both manufacturing and services. Services PMI is forecast to fall 54.5 to 53.7, while manufacturing PMI is expected to remain stuck under the critical 50 level.
Aussie recovers, but all others struggle versus USD
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 26 – 30 June
All times AEST
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
