Every dog has its day, and the Australian dollar had more than a couple of them last week.
The Australian ecostats were fairly good, for a change, with a sharp rise in building permits, a respectable increase in retail sales and improved activity in the manufacturing and services sectors.
Rounding off the positive news was a 0.8 per cent expansion of gross domestic product in the fourth quarter.
The Aussie was the top-performing major currency, strengthening by two cents against sterling. The NZ dollar was not far behind, as much because of the Aussie halo effect as because of the single New Zealand statistic; a 6.3 per cent quarterly increase in manufacturing sales.
The euro enjoyed a relief rally after the European Central Bank delivered no fresh stimulus at its monthly policy meeting. Although the decision was not a surprise, investors had been nervous that the ECB might come up with some cunning wheeze to drag inflation up towards its 2 per cent target. It did not, and the president gave his usual reassurance that to hit that target - eventually - would not require action by the ECB.
The US dollar received less support than it might have expected after the employment report showed 175,000 more people on nonfarm payrolls in February. Even with upward revisions to the previous two months' numbers, which meant a net 50k more people in work than investors had been expecting, all the dollar could manage was a recovery to its position a couple of hours before the announcement.
The dog that didn't bark was Russia's annexation of Ukraine's Crimea region. Although there was a bit of a to-do at the beginning of the week, investors soon lost interest, either because they thought it would all blow over or because they could not figure out the currency implications if it did not.
No comments yet