Aussie bounces despite weak data

 

Capital expenditure drops

The Australian dollar kept to its tight range this week with a mild rebound in subdued trading this morning. The upmove came despite a weak set of data which might encourage the RBA to commit to easing rates. Private capital expenditure fell 1.7% in the first quarter, missing economists’ forecasts of a +0.5% reading. Expenditure has seen three negative readings in the last year, with last quarter’s 1.3% expansion the most since 2014.

Building permits in April were also on the weak side, with a 4.7% decline month-on-month and a 24.2% drop from a year earlier. The Australian dollar traded higher after the data, rising to an intraday high of 0.6930 and has now settled at 0.6926. AUD/JPY was barely moved at 75.88 and looks set for a second consecutive daily gain.

 

AUD/USD Daily Chart

Source: OANDA fxTrade

 

NZ budget shows increased spending

New Zealand’s Finance Minister Robertson presented the government’s 2019 budget today, with the highlights being a cut in the GDP growth outlook, increased spending and a bigger bond issuance plan to pay for it. 2019 GDP growth was cut to 2.1% from 2.9% while 2020 growth is pegged at 3.2%. The 2019/20 surplus was trimmed to NZ$1.3 billion from NZ$4.1 billion. He commented that the increased spending would help the domestic economy in the face of a global slowdown and heightened risks from the US-China trade spat and Brexit uncertainty.

NZD/USD is having an up-day for the first time in four days as the US dollar takes a breather from the rebound this week.

 

NZD/USD Daily Chart

Source: OANDA fxTrade

 

How strong is US growth?

The US growth data for the first quarter is released today, with surveys suggesting that we can expect a slight slowdown from Q4. The latest Bloomberg survey show a spread of 2.7% to 3.4% from weakest to strongest, with a total of 67 analysts taking part. The median estimate is 3.0%.

Q1 GDP growth data from other economies has seen a slight uptick from the previous quarter, with Germany springing back to positive growth, Japan beating economists’ estimates and China maintaining its 6.4% pace.

Earlier this morning, PBOC adviser Liu Shijin said it would be no problem for China to keep 2019 GDP growth above 6.2%, within the NPC’s target rate of 6.0-6.5%.

 

The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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