In a mostly quiet trading week for FX, the New Zealand dollar took the top spot following a positive reaction to the latest monetary policy statement from the Reserve Bank of New Zealand.
Notable News & Economic Updates:
- Iron Ore Price Caves on Monday But Miners Remain Hugely Profitable, For Now
- UK refuses to back Biden push for minimum corporation tax
- Fed’s Brainard Breaks Down CBDC Policy Considerations, Sees Price Pressures Waning in the Future
- Oil prices up rise on potential hitch in Iran talks
- Corn futures drop 6% on larger supply in latest speculative unraveling in the commodities markets
- Nigeria’s central bank holds interest rates to support growth
- Singapore’s economy grows at its fastest pace in more than a year
- China’s industrial profits growth slows in April amid high commodity prices
- France’s Le Maire urges G7 to back global corporate tax
- Brent nudges towards $70 on rosy U.S. data, oil demand outlook
- Gold flirts with $1,900 again after U.S. inflation ticks
- 7 million Australians ordered into new COVID-19 lockdown
- S&P 500 gains on Friday to wrap up 4th straight positive month, sits less than 1% from record high
Risk-Off vibes
Dollar, Gold, S&P 500, 10-yr Treasury Yield, Bitcoin, Oil
It was a mostly quiet week for the financial markets, but it was a positive learning one for traders. Most asset classes were able to close in the green on Friday, with equities marching towards new all-time highs and the crypto markets recovering after last week’s liquidation event. Although, it’s not looking to great for crypto this weekend as the broad sector dips into the Friday close.
The major currencies were a bit subdued, but we did see some action from the New Zealand dollar after the Reserve Bank of New Zealand hinted that they may raise interest rates next year. This increased the gains the Kiwi was already seeing due to the positive global risk sentiment lean, and was able to hold onto into the weekend.
The biggest loser of the week was the Japanese yen, likely not only feeling the move away from safe havens as economic sentiment updates continued to show optimism around the world, but possibly also on signs from Japan that inflation is slipping and that the employment sector is on shaky footing. And we saw a big move lower on Thursday, possibly related to rumors that U.S. President Biden will likely propose a $6 trillion fiscal plan.
USD Pairs
Overlay of USD Pairs: 1-Hour Forex Chart
- Fed’s George says doesn’t dismiss risk of inflation surge
- U.S. house prices are continuing to rise, increasing by 12.6% year-over-year – FHFA
- U.S. new home sales drop in April; March sales revised sharply lower
- Mid-Atlantic Manufacturing Activity Strengthened in May — Richmond Fed
- U.S. mortgage applications tick down as refinance activity declines -MBA
- Fed’s Quarles signals open to talks on bond program
- U.S. GDP expanded at unrevised 6.4% rate in first quarter
- U.S. pending home sales decline in April
- Jobs picture shows more improvement as unemployment claims slide
- The core personal consumption expenditures price index increased 3.1% in April from a year earlier.
- Nearly half of Americans have at least one vaccine shot as Covid case counts fall further
GBP Pairs
Overlay of GBP Pairs: 1-Hour Forex Chart
- Bank of England plays down risk of runaway U.K. inflation
- UK borrowing shows first annual fall since start of pandemic
- UK retail sales subdued in May – CBI
- Sterling lifted by BoE comments on rate hike timing
- UK approves Janssen single-dose Covid vaccine for use
EUR Pairs
Overlay of EUR Pairs: 1-Hour Forex Chart
- Sentiment among German managers has “improved considerably” in May
- German GDP falls more than expected’
- ECB’s Panetta sees no justification for slowing bond-buying
- German consumer morale improves less than expected heading into June – GfK
- German import prices rose 1.4% vs. 1.0% consensus
- French consumer spending slid 8.3% vs. projected 4.1% drop
- French preliminary CPI at 0.3% as expected
- French economy contracted 0.1% in Q1 2021 vs. estimated 0.4% growth figure
- ECB board member Schnabel: Eurozone passed a turning point but stimulus still needed
CHF Pairs
Overlay of CHF Pairs: 1-Hour Forex Chart
- Swiss National Bank’s Jordan sees no reason to change policy course
- Swiss trade balance for April 2021: CHF +3.3 billion
- Kof Economic barometer rises to 143.19 in May vs. 136.41 in April, a new all-time high.
CAD Pairs
Overlay of CAD Pairs: 1-Hour Forex Chart
- Bank Of Canada Governor Macklem Says Tapering Is Right Move For Economy
- In the first quarter of 2021, Canadian corporations reported an increase of 18.1% (+$15.4 billion) in net income before taxes, to $100.7 billion.
NZD Pairs
Overlay of NZD Pairs: 1-Hour Forex Chart
- New Zealand headline retail sales up 2.5% vs. projected 1.8% drop in Q1
- New Zealand core retail sales up 3.2% vs. expected 1.0% decline
- RBNZ kept interest rates on hold at 0.25% as expected; hints at end to pandemic era monetary policy
- RBNZ Governor Orr: Inflation pressures are normalizing
AUD Pairs
Overlay of AUD Pairs: 1-Hour Forex Chart
- For April 2021, Australia showed a goods trade surplus of $10,141m
- Australia’s MI leading index up by 0.2% in May
- Australian construction work done up 2.4% vs. 1.9% in Q1 2021
- Australia Q1 business investment booms in boost to economy
JPY Pairs
Overlay of Inverted JPY Pairs: 1-Hour Forex Chart
- BOJ’s Kuroda warns of uneven global recovery from pandemic
- Bank of Japan core CPI -0.1% in April
- Tokyo core CPI slid another 0.2% as expected
- Japanese unemployment rate rose from 2.6% to 2.8% vs. 2.7% forecast
- BOJ considering six-month extension of its pandemic aid program