Morning brief for April 20

Morning brief for April 20

2019-11-11 • Actualizada

It appeared that Kiwi currency, unlike flightless kiwi bird, can fly. NZD/USD soared above 0.7040 on the release of the upbeat NZ first quarter inflation data. The inflation figures came in higher than expected and above the Reserve Bank of New Zealand coveted target for the first time in 5 years. The strong print was due to higher petrol, cigarettes and tobacco prices. The Reserve Bank of New Zealand will unlikely respond to this unprecedented upsurge with tightening measure at the upcoming meeting; the bank foreshadowed a gradual increase in inflation figures in its recent statement.

US dollar was a bit strong in the past session as geopolitical tensions have eased a bit after Pentagon confirmed that it hadn’t sent its armada to North Korea directly.  EUR/USD partially erased its yesterday losses and ticked up to 1.0725. On Wednesday, we received the final CPI figures out of the Eurozone that confirmed the numbers of preliminary print. There was a pullback in the rate of inflation from February’s 2.0% to March’s 1.5%. This eliminates the risk of the substantial change in the ECB policy guidance in the near-term. The latest French election poll showed Macron getting 25% in the first round, Le Pen 22% (unchanged since the previous poll), Fillon sliding back to 19% from his earlier 19%, and Melenchon getting 19% (unchanged). Technically, the euro may extend higher towards 1.0770. In the reverse scenario, the single currency may move back below 1.2660.

GBP/USD slowed down its pace and retraced to 1.2805 from yesterday’s peak (1.2902). earlier this week British PM Theresa May called a snap election and gained parliamentary support to hold the 8 June election. The pound rallied as investors interpreted the announcement as a strengthening of Theresa May’s hand. If the Tories get more seats in parliament, Theresa May will have a strong front to refer in times of hardships connected with negotiating EU-UK trade relationships.

Aussie rose to 0.7505 from yesterday’s low at 0.7485. Earlier this morning we got NAB’s quarterly business survey that showed a quite good business conditions for Australia. Technically, the negative undertone is still present; the price might be up to test the supports at 0.7470, 0.7430. A move of the quotes above 0.7520/0.7570 will be a signal that the downward pressure has eased.

The yen slipped to 108.90 against the dollar. Japan’s merchandise trade surplus narrowed in March, as import growth outpaced exports. The trade surplus was ¥172.2 billion last month, as official data showed. It seems that the bearish phase is close to ending. A break of 109.00, 109.30 resistances will be a good signal of the yen’s weakness. Those who are shorts will likely prefer to book profits in case of a dip to 108.10.

USD/CAD spiked to 1.3490 yesterday after a sharp fall in oil prices. Brent oil futures dropped to $52.56 following reports of an increase in the US gasoline inventories. 

 

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