Most major currencies sit not far from where they did yesterday morning.
However, the AUD has been the main underperformer.
Most markets were relatively orderly overnight in the absence of major data or policy revelations. A speech by ECB President Draghi in Washington did catch some attention.
Pushing back on speculation the Bank could prematurely phase out its QE programme he said the Bank will implement its bond-buying programme “in full”, or at least “until we see a sustained adjustment in the path of inflation”. The EUR/USD had pushed above 1.1440 late last evening but has slipped to trade around 1.1390 currently.
A soft US PPI number also gained some attention overnight. However, it appears the negative number was largely due to a 4.7%m/m decline in gasoline prices in the month rather than representing more broad deflationary threat.
The USD has traded a fairly steady path for most of the night. The USD index trades at 93.50 this morning.
The AUD/USD has been the night’s underperformer but even here the moves have not been large. From around 0.8130 last evening the AUD/USD finds itself around 0.8070 at present. The next major event for the AUD will be the release of the RBA’s May minutes next Tuesday.
The NZD/USD was given a boost yesterday morning by the very strong Q1 NZ retail sales data release. The 2.7% quarterly lift in retail sales volumes was the strongest since 2003. This takes the annual rate of growth to a massive 7.4%. There are no signs of demand softness here, something the RBNZ has indicated it is keeping a sharp eye out for.
After the release, and later in the day, the NZD/USD briefly popped its head above 0.7560. However, in the early hours of this morning the currency has drifted off to trade at 0.7490. Near-term support is eyed at 0.7420, while resistance is seen at the intra-night highs around 0.7560.
It looks to be a relatively quiet end to the week with no data scheduled on either side of the Tasman. Tonight there are a cluster of US data points that could influence USD sentiment into weekend.
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Kymberly Martin is on the BNZ Research team. All its research is available here.