By Dan Bell
Most major currencies are little changed overnight, with the exception of GBP which came under further pressure following the Bank of England’s Quarterly Inflation Report.
NZDGBP currently sitting at 0.5400/0.5420, fresh all time highs for the pair. NZDUSD put in its smallest ranging day for around 6 weeks.
US retail sales for January improved somewhat, printing at +0.1% month on month, exactly as expected.
While this is not earth shattering by any means, most view this as a solid result, particularly in light of looming US tax hikes.
President Obama’s State of the Union address came and went yesterday, leaving little impression on markets.
A free trade agreement with the EU, infrastructure spending, an increased minimum wage, and changes to the corporate tax code were all on the agenda, but few believe that the Republican controlled house of representatives would allow the passage of such legislation any time soon.
Elsewhere Eurozone Industrial Production rose 0.7% month on month in December, representing the first increase since August last year. European stocks were slightly firmer on the news.
The G20 meeting starts tomorrow in Moscow. FX is clearly on the agenda, after recent comments from the ECB with regard to EUR strength, as well as continued JPY and CNY weakness.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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