Article Highlights

  • U.S. flash manufacturing PMI down from 55.5 to 55.4
  • U.S. new home sales at 384K vs. 455K expected
  • RBNZ increased rates by 0.25%, maintains rate hike bias
  • RBNZ expects inflation to keep rising for next two years
  • Canadian headline retail sales up by 0.5% as expected
  • Canadian core retail sales show 0.6% increase
  • Chinese CB leading index due today
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Weak U.S. data? So what? The Greenback managed to score some gains against most of its forex counterparts in recent trading, pushing EUR/USD to a low of 1.3810 and GBP/USD to a low of 1.6760. After its sharp slide on the heels of bleak Australian CPI, AUD/USD reached a low of .9267 then pulled up close to .9300.

U.S. flash manufacturing PMI dipped from 55.5 to 55.4 in April, reflecting a slight slowdown in the sector’s expansion. New home sales was remarkably weaker than expected, as it came in at 384K instead of the estimated 455K figure. Over in Canada, consumer spending data came in line with expectations as the headline retail sales figure posted a 0.5% rise while core retail sales saw a 0.6% increase. USD/CAD popped up to a high of 1.1051 before retreating to the 1.1030 levels.

A few hours ago, the RBNZ had its monetary policy statement and announced a 0.25% rate hike. The Kiwi soared during the event, as RBNZ Governor Poloz hinted that strong inflationary pressures over the next two years might lead to another rate hike. As always, he attempted to jawbone the New Zealand dollar by saying that currency appreciation could keep inflation at bay, but these words weren’t enough to derail NZD/USD’s climb past the .8600 major psychological level.

No other major events are lined up for the rest of the Asian trading session, leaving risk sentiment as the main driver of forex price action. Do keep an eye out for the Chinese CB leading index, as improvements could help boost risk appetite.

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