Weak US Data Holds Back The Australian And New Zealand Dollars

Modified: Monday, 19 March 2012 08:20 BST - Written by David Woodsmith

STORY LINK Weak US Data Holds Back The Australian And New Zealand Dollars

The Pound Sterling to Australian Dollar (GBP AUD) exchange rate is 1.4952.

Last week’s session ended with a slew of data releases across the global economy. Prominent amongst these was Friday morning’s whole of eurozone Trade Balance numbers for January, which showed a significant drop-off from December’s counterpart figure of €9.1bn to print at -€7.6bn. This alarming current account deficit held back the single currency during Friday’s session, sending the GBP EUR exchange rate up to 1.2058, its highest level since 17th February.

Meanwhile, on the other side of the Atlantic, Friday afternoon saw the release of several pieces of significant US data. Recent economic figures from the states have suggested that the world’s most active economy is strengthening, with domestic growth and labour market numbers providing particular cause for optimism. However, Friday’s numbers were less encouraging, as US Industrial Production data showed no change in output in the US manufacturing, mining and utility sectors last month. Analysts had expected that the data would point to a 0.4% increase in production in these sectors.

Friday afternoon’s closely-watched Michigan Confidence survey also served to disappoint, printing at 74.3 versus an anticipated 75.6.

The weak postings for the US economy ensured that the high-yielding currencies ended the week with a whimper rather than a bang, with the GBP AUD exchange rate holding just below the 1.5000 level. Demand for the Kiwi Dollar remained similarly subdued in the wake of the US numbers, with GBP NZD holding above 1.9200 for much of Friday afternoon’s session.

Today sees a spartan day for data releases. The highlight comes later tonight, with the release of the Reserve Bank of Australia’s minutes of its March board meeting. A repeat of recent dovish statements from the board members could promote further selling pressure on the Aussie, potentially sending the GBP AUD exchange rate back towards last Wednesday’s 2-month high of 1.5025.

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