For the Greenback and market risk sentiment, U.S retail sales figures, and the FOMC economic and interest rate projections will be key drivers.
Earlier in the Day:
It’s was a relatively busy start to the day on the economic calendar this morning. The Kiwi Dollar and the Japanese Yen were in action.
For the Kiwi Dollar
Current account figures for the 2nd quarter were in focus. Quarter-on-quarter, the current account surplus widened from NZ$1.56bn to NZ$1.83bn. Economists had forecast a narrowing to NZ$0.60bn.
Year-on-year, the current account deficit narrowed from NZ$8.51bn to NZ$5.77bn. Economists had forecast a narrowing to NZ$7.37bn.
The current account as a percentage of GDP stood at -1.9% in the 2nd quarter. This was up from -2.7% in the 1st quarter. Economists had forecast a percentage of GDP of -2.5%.
The Kiwi Dollar moved from $0.67124 to $0.67128 upon release of the numbers. At the time of writing, the Kiwi Dollar was up by 0.01% to $0.6715.
For the Japanese Yen
In August, Japan’s trade surplus widened from ¥10.9bn to ¥248.3bn. Economists had forecast a deficit of ¥77.6bn.
According to figures released by the Ministry of Finance,
In August, exports slid by 14.8%, year-on-year.
While exports to Asia fell by 7.8%, exports to China rose by 5.1%.
A 4% fall in exports to HK, a 13.8% fall to South Korea, a 31.3% slump in exports to Thailand, and a 26.1% decline to Singapore weighed.
Exports to Australia slumped by 20.9%, with exports to the U.S tumbling by 21.3%.
Things were not much better to Europe, with exports to Western Europe sliding by 15.3%.
Imports tumbled by 20.8% in August, year-on-year.
While imports from Asia fell by 11.2%, imports from Australia tumbled by 43.4%.
Imports from the U.S slid by 22%, with imports from Europe falling by 22.2%.
The Japanese Yen moved from ¥105.402 to ¥105.308 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.14% ¥105.29 against the U.S Dollar.
At the time of writing, the Aussie Dollar was up by 0.03% to $0.7305.
The Day Ahead:
For the EUR
It’s a relatively quiet day ahead on the economic calendar. Key stats include July trade data for the Eurozone.
We don’t expect too much influence on the EUR, however, barring particularly dire numbers.
On the day, the monetary policy and geopolitics will be key drivers. Brexit will be a key area of interest, with the FOMC policy decision and economic and interest rate projections of particular interest.
We saw the Dollar tumble in response to the lower for longer and policy framework revision. Following last week’s ECB press conference, a dovish FED could see the EUR head back towards $1.20 levels.
At the time of writing, the EUR was down by 0.05% to $1.1841.
For the Pound
It’s a relatively busy day ahead on the economic calendar. Key stats include August inflation figures.
While consumer prices will influence, expect wholesale inflation figures to have a greater impact early in the day.
Away from the economic calendar, Brexit will remain the key driver, however. There’s been plenty of chatter over the Internal Market Bill and the PM’s desire to protect Northern Ireland from the EU.
Any further updates will be of influence as the Internal Market Bill gets sliced and diced in Westminster.
At the time of writing, the Pound was up by 0.09% to $1.2900.
Across the Pond
It’s also a relatively busy day ahead for the U.S Dollar. Key stats include August retail sales figures.
Expect the numbers to influence risk sentiment ahead of the main event. Consumer spending is a key contributor and will need to continue to rebound to support the economic recovery.
The main event of the day is the FOMC monetary policy decision, however. With the FOMC expected to stand pat, the market focus will be on the FOMC economic and interest rate projections.
Following the announcement of the new monetary policy framework, the markets are expecting interest rate forecasts to remain dovish.
The FOMC’s outlook on the economic recovery is an area of uncertainty…
The Dollar Spot Index was up by 0.12% to 93.166 at the time of writing.
For the Loonie
It’s a busier day ahead, with key stats including August inflation and July Foreign Securities Purchases figures.
Expect the inflation figures to have the greatest impact on the day.
We will also expect the weekly crude oil inventory numbers to also provide direction.
At the time of writing, the Loonie was up by 0.02% to C$1.3183 against the U.S Dollar.