- Japanese all industries activity index down by 4.3% vs. 3.7% expected decline
- New Zealand Q1 2014 GDP at 1.0% vs. 1.2% consensus
- New Zealand Q4 2013 GDP upgraded from 0.9% to 1.0%
- SNB interest rate statement coming up
- U.K. retail sales to show 0.5% drop?
Not even a weaker than expected Q1 2014 GDP reading was enough to stop the Kiwi from outpacing most of its major forex counterparts in today’s Asian trading session! The report showed that the economy expanded by 1.0% during the period, slower compared to the estimated 1.2% growth figure. The good news is that the previous quarter’s reading was revised higher to show a 1.0% GDP growth from the initially reported 0.9% expansion.
On top of that, RBNZ rate hike predictions from several market analysts in top financial firms gave the Kiwi an additional boost. For instance, Citi and Deutsche Bank NZ mentioned that the latest GDP release won’t stop the New Zealand central bank from raising rates again in their July 24 policy statement. NZD/USD surged to a high of .8737 moments after the GDP release while EUR/NZD tumbled back below the 1.5600 handle.
Even the Australian dollar was able to benefit from the upbeat assessment for the New Zealand economy, as the Aussie was able to extend its gains against the dollar and the yen for the past few hours. The Japanese currency, meanwhile, had a mixed performance as it strengthened against the euro and pound but gave way to the commodity currencies. Japan’s all industries activity index showed a worse than expected 4.3% decline versus the estimated 3.7% drop.
The next few trading hours could be a nail-biter, particularly for franc traders who are waiting for the SNB interest rate statement. Word through Wall Street is that SNB Thomas Jordan and his men might ramp up their efforts to keep the Swiss franc weak, whether through actual easing moves or mere jawboning, since the ECB has announced a set of rate cuts.
Another report that could cause some action in this London trading session is the U.K. retail sales release, which is expected to show a 0.5% decline after rising by 1.3% in April. With consecutive gains in the U.K. employment scene, there’s a good chance that the actual results might surprise to the upside, which might lend more support to the pound now that the BOE looks ready to hike rates this year.
Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.
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