The G-10 rundown
USD – the broad USD strength has faded slightly as risk appetite has returned to start the week and traders are snapping up beaten EM currencies outside of Asia.
EUR – watching whether the break below 1.0900 in EURUSD holds here and looking on how quickly the EU can cobble together a fiscal impulse of size – plenty of upside potential there if it ever can. In the meantime, we have the additional risk for the euro if Trump moves against EU auto important with tariff announcements.
JPY – a very ugly GDP print overnight (-6.3% annualized versus -3.8% expected), but the impact was seen largely down to the sales tax hike in October pulling demand forward to the prior quarter and on the impact from a large typhoon. Still – this was far weaker than expected and underlines focus on bringing forward stimulus (also helping EURJPY lower recently?). More interesting to see how the late Q1 data shapes up on possible Covid-19 virus impact, starting with flash Japanese Feb. PMI’s up on Friday this week.
GBP – as discussed above, sterling riding high on hopes for generous fiscal stimulus measures – have to be wary of the risk of unfriendly trade deal negotiations with the EU, but that issue may only become more pressing in second half of this year.
CHF – EURCHF challenging below interesting levels (early 2017 lows) and the SNB feeling less urgency to act here as the Euro is very weak and the US has put Switzerland back on the currency manipulator watchlist – room for the pair to run to at least 1.0500?
AUD – not looking for much from RBA minutes. Aussie traders caught in an awkward area near the post-GFC lows in AUDUSD with uncertainty over how the region’s economy shapes up from here on the ongoing Covid-19 virus impact.
CAD – as oil prices have bounced back modestly, so has CAD, with room to perhaps 1.3200 in USDCAD and even lower before the bullish outlook begins to struggle.
NZD – figuring that AUD shows higher beta than NZD to China outlook – and AUDNZD looks long-term undervalued, but missing a signal.
SEK – to get EURSEK below 10.40 from here, we may need a stronger EU outlook and fiscal stimulus from both the EU and Sweden.
NOK – the oil comeback powering EURNOK lower, but 10.00 looms as an important level and the Norges Bank rate outlook will tilt more steeply for cuts if the domestic outlook deteriorates further.
Upcoming Economic Calendar Highlights (all times GMT)
- US Markets Closed for President’s Day
- 1400 – ECB’s Lane to Speak
- 2000 – New Zealand REINZ House Sales
- 0030 – Australia RBA Minutes