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USD likely to dip on US trade figures, NZ employment forecast to slow

business-articlesUSD likely to dip on US trade figures, NZ employment forecast to slow
  • USD may slip if US trade deficit widens
  • Canada’s Ivey PMI forecast to rise
  • Possible slowdown in employment to pressure NZD
USD poised to fall on trade figures

The US dollar may tumble later this afternoon as the US publishes its latest trade balance figures.
Economists currently forecast that December’s data will show the US trade deficit climbed from -$50.5bn to -$52bn.

Such a jump would see the US trade gap at its highest levels since 2009 with imports continuing to rise to a new record high as demand for consumer goods soared over the Christmas period.

However the reading could easily beat expectations if exports continue to pick up, with global demand for US produced cars and aircraft having propelled the total value of exports to record highs in November.

Ivey PMI may bolster Canadian Dollar

The Canadian dollar may tick a little higher today following the release of Canada’s latest Ivey PMI survey.

The index, a measurement of domestic business confidence, is January expected to have climbed from a three-month low of 60.4 to 61, thanks in part to upbeat employment figures.

This would leave the index well above the long-term average of 56.94 and may bolster hopes of further monetary tightening from the Bank of Canada in 2018.

One source of possible anxiety for firms, which may cause the PMI to slide, is the ongoing uncertainty surrounding NAFTA, with suggestions that the US is close to pulling out of the agreement likely to weigh on sentiment.

New Zealand employment growth forecast to slow

Markets may shy away from NZD later this evening as New Zealand releases its latest employment report.

While the fourth quarter report is expected to reveal that the unemployment rate held at a decade low of 4.6%, it is expected that this will be mostly due to a decline in the participation rate.

In fact employment growth in New Zealand is forecast to have slowed from 2.2% to just 0.2% in the last three months of 2017. This considerable slowing in employment growth is likely to drag on the New Zealand dollar.

Upcoming Data

Tuesday, 6 February, 2018
13:30                     USD Trade Balance   
15:00                     CAD Ivey PMI 
21:45                     NZD Unemployment Rate
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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