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- Confirmation of easing inflation to limit euro demand
- US dollar vulnerable to weaker manufacturing data
- NZD exchange rates set for fresh decline on sliding consumer confidence
Euro volatility limited as no change expected for finalised inflation data
No change is forecast for the finalised August Eurozone consumer price index data today, limiting the potential impact on EUR exchange rates.
Confirmation that the inflation rate eased from 2.1% to 2.0% on the year is unlikely to offer any support to the euro, though.
With inflationary pressure failing to hold up as policymakers would like, this limits the likelihood of the European Central Bank (ECB) raising interest rates in the months ahead.
A positive revision to the figures, however, could give EUR exchange rates a boost this morning.
Manufacturing index softening could dent US dollar
Demand for the US dollar could weaken once again if the Empire manufacturing index declines on the month, as forecast.
Evidence of slowing growth within the US manufacturing sector would leave USD exchange rates exposed to fresh selling pressure in the short term.
While even a sharp decline in the index is unlikely to deter the Federal Reserve from raising interest rates at its September policy meeting this could still weigh on the US dollar.
If the manufacturing sector demonstrates signs of resilience, though, USD exchange rates could find a fresh rallying point, especially if market tensions pick back up.
Weaker consumer confidence likely to drag New Zealand dollar back down
The New Zealand dollar may return to a downtrend tonight as markets expect to see the third quarter Westpac consumer confidence index dip from 108.6 to 107.
Signs that sentiment is deteriorating further would increase the pressure on NZD exchange rates, highlighting the weaker outlook of the domestic economy.
As the odds still suggest that the Reserve Bank of New Zealand (RBNZ) is more likely to cut interest rates than raise them any disappointing data is likely to discourage investors.
Unless sentiment shows signs of improving, NZD exchange rates could head back in the direction of their recent multi-month lows.
Monday, 17th September 2018
10:00 EUR Eurozone Consumer Price Index
13:30 USD Empire Manufacturing Index
23:00 NZD Westpac Consumer Confidence Index
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)