Currency News Data Watch : Rising US Dollar Unsettles Forecasts for AUD, NZD, CAD, NOK

April 7, 2016 - Written by Ben Hughes

STORY LINK Currency News Data Watch : Rising US Dollar Unsettles Forecasts for AUD, NZD, CAD, NOK

The US Dollar has managed to appreciate against its competitors today, which has spelled little positive for the world's commodity currencies.

Positive Chinese Data Engendered a Risk-On Trading Environment

Yesterday’s session was completely void of tier one data releases, but a plethora of tier two numbers proved to be market-moving for the Pound Sterling (currency : GBP) against the other major global tenders.

Two Purchasing Manager Index surveys, both published in China during the early hours, provided some reason for optimism that the world’s second largest economy is not heading for the ‘hard landing’ that some analysts fear.

The latest Caixin Purchasing Managers Index pointed to an acceleration in the pace at which China’s vast and burgeoning services sector is expanding; the print of 52.2 for the March figure versus February’s counterpart number of 51.2 provided some grounds for encouragement and the Caixin PMI composite survey, which looks at the whole of the nation’s economy, also showed a substantial improvement, moving back above the 50.0 threshold following February’s print of 49.4.

Any result above 50 for a PMI survey points to expansion, while sub-50 suggests contraction.

The positive numbers from China engendered a ‘risk on’ trading environment on the day and the world’s stock markets climbed as a consequence.

London’s FTSE 100 gained 1.13% on the day, while the broad-ranging S&P index in Chicago was trading up by over 0.5% by the middle part of America’s trading day. In the currency markets, the increased appetite for risk helped the Commodity Dollars, with the Australian Dollar (currency : AUD) gaining the best part of a percentage point against Sterling and the New Zealand Dollar (currency : NZD) improving by 0.40% against the UK unit.

Crude Oil Prices Rise, NOK and CAD Exchange Rates Improve

Elsewhere, the price of a barrel of Brent Crude Oil jumped from $38.5 to almost $40 following yesterday afternoon’s weekly US Crude Oil Inventories data showed a surprise decrease in stocks of ‘Black Gold’ Stateside.

The U.S. Energy Information Administration (EIA) reported that inventories of Crude Oil dropped by almost five million barrels in the last week. Analysts expect the news to support the Canadian Dollar (currency : CAD) and Norwegian Krone (currency : NOK) into the medium term.

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TAGS: Australian Dollar Forecasts Canadian Dollar Forecasts New Zealand Do Forecasts