Currency

COVID-19, Geopolitics, Powell, and U.S Jobless Claims will Keep the Markets Busy

Earlier in the Day:

It’s was a quieter start to the day on the economic calendar this morning. The Kiwi Dollar was in action in the early part of the day.

For the Kiwi Dollar

Trade data was in focus in the early hours of this morning. In August, New Zealand’s trade balance slid from a NZ$447m surplus to a NZ$353m deficit. Year-on-year, the trade surplus widened from NZ$50m to NZ$1,340m.

According to NZStats,

  • A close to NZ$1bn slump in imports led to the largest annual trade surplus since 2014.
  • The value of monthly goods imports fell NZ$940m (-16%) from August 2019, with imports declining across all the main economic categories.
  • By contrast, higher exports of kiwifruit and aircraft supported a NZ$349m (+8.6%) rise in exports from August 2019.

The Kiwi Dollar moved from $0.65500 to $0.65507 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.35% to $0.6540.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.04% ¥105.43 against the U.S Dollar, with the Aussie Dollar down by 0.23% to $0.7056.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Germany’s IFO Business Climate Index and sub-index figures for September are due out.

With little else for the markets to focus on in the early part of the session, expect any slump in sentiment to weigh.

Away from the economic calendar, the latest COVID-19 numbers, and any chatter from member states on curbing the spread will be key.

On the geopolitical risk front, the markets will also need to monitor chatter on Brexit and any antagonizing messages from Beijing or Washington.

At the time of writing, the EUR was up by 0.02% to $1.1662.

For the Pound

It’s a quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

On the monetary policy front, however, BoE Gov. Bailey is scheduled to speak later this afternoon.

Following the government’s new COVID-19 containment measures, expect any chatter on monetary policy to influence.

Away from the economic calendar, there is also Brexit and the latest COVID-19 figures that will garner plenty of interest. The market fear will be that the British Government may be forced into delivering stricter containment measures should the number of new cases continue to rise.

At the time of writing, the Pound was down by 0.05% to $1.2718.

Across the Pond

It’s a relatively busy day ahead for the U.S Dollar. Key stats include August new home sales and the weekly jobless claims figures.

Expect the weekly jobless claims numbers to have the greatest impact on the day. An unexpected rise amidst the recent rise in new COVID-19 cases would test market risk appetite.

Later in the day, FED Chair Powell is due to deliver another day of testimony that will also draw plenty of attention. U.S Treasury Secretary Mnuchin is also scheduled to speak, which could be interesting…

The Dollar Spot Index was down by 0.01% to 94.383 at the time of writing.

For the Loonie

It’s a particularly quiet day ahead, with no material stats due out today.

The lack of stats will leave the Loonie in the hands of market risk sentiment.

Key areas of focus remain U.S – China relations and COVID-19.

At the time of writing, the Loonie was down by 0.04% to C$1.3391 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.