Earlier in the day:
It was a busier start to the day on the economic calendar this morning. The Aussie dollar was in action early this morning with economic data from China also in focus.
For the Aussie dollar
Inflation and business confidence figures were on the agenda.
Consumer prices rose 0.9% in the 4th quarter after a 1.6% increase in the 3rd quarter. Economists had forecast an increase of 0.7%.
The annual inflation rate rose from 0.7% to 0.9%. Economists had forecast that the annual inflation rate would remain constant at 0.7%.
According to ABS,
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A rise in tobacco excise taxes and the introduction, continuation and completion of a number of government regulations were influenced.
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Tobacco prices rose 10.9% in the fourth quarter after tobacco excise tax rose 12.5%.
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Childcare prices rose 37.7% after free childcare was discontinued.
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Domestic vacation travel prices rose 6.3% after the reopening of state and territorial borders.
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The prices for medical and hospital services also increased by 2.5%.
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A 7.5% decrease in electricity prices resulted from the WA Household Electricity Credit, which granted households a one-off loan.
In December, the NAB Business Confidence Index fell from +12.0 to +4.0. In November the index had risen from +9 to +12.
According to the monthly company survey
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A decline in business confidence in NSW, Victoria and Queensland weighed on the headline.
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The decrease was due to a COVID-19 outbreak in Sydney at the end of the year.
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In December, with the exception of export conditions and capital spending, most indicators were broadly at or above pre-virus levels.
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While business confidence waned, the Business Conditions Index rose 7 points to +14 points, its highest level since September 2018.
Looking at the key indicators, the employment sub-index rose from -4 to +9, which indicates much-needed employment growth.
However, the futures traded fell from +6 points to +1 points, with the export sub-index falling from -4 to -5 points.
The story goes on
The Australian dollar moved from $ 0.77554 to $ 0.77535 after the inflation and business confidence figures were released. At the time of writing, the Aussie dollar was down 0.10% to $ 0.7739.
From China
Industrial profits rose towards the end of the year.
Year over year, industrial profits rose 20.10% in December, after rising 15.50% in November.
Since the beginning of the year, earnings increased by 4.10% through December. In November earnings were up 2.40% year-to-date.
The Australian dollar moved from $ 0.77553 to $ 0.77457 after the numbers were released.
For the majors
At the time of writing, the Japanese yen was down 0.07% against the US dollar to 103.69 yen while the kiwi dollar was down 0.12% to $ 0.7227.
The day ahead:
For the EUR
It’s a relatively calm day on the economic calendar. The German GfK consumer climate figures for February will be in focus later in the morning.
Following news of vaccine supply shortages and expanded lockdown measures, a sharp drop in consumer confidence would weigh on the EUR.
Expect COVID-19 updates outside of the economic calendar to continue to impact.
At the time of writing, the EUR was unchanged at $ 1.2160.
For the pound
A particularly quiet day is ahead in the economic calendar. There are no material statistics that give the pound a direction.
The lack of statistics will leave the pound in the hands of market risk sentiment that day.
However, COVID-19 news will also have an impact. A continued surge in vaccination rates and a decline in infection rates should support the pound. Further updates of the new strains and the effectiveness of vaccines will also need to be monitored.
At the time of writing, the pound was down 0.04% to $ 1.3731.
Across the pond
It’s a relatively busy day on the economic calendar. December Durable Goods and Core Durable Goods orders are due later today from the United States.
Expect the core numbers for durable goods to have the greatest impact, with the outlook for riskier assets being positive.
Later that day, the Fed will also make its first monetary policy decision of the year. With the FED likely to keep interest rates unchanged, the tariff statement and press conference should be the main drivers.
Aside from the economic calendar, however, the chatter about Capitol Hill and COVID-19 updates also remains in focus.
At the time of writing, the Dollar Spot Index was up 0.06% to 90.223.
For the loonie
In terms of economic data, it’s an especially quiet day with no essential statistics to give the loonie any direction.
The lack of statistics will leave the loonie in the hands of API and EIA crude stocks numbers for the week.
Away from the economic calendar, sentiment towards US incentives will also affect the day.
At the time of writing, the loonie was down 0.16% against the US dollar to $ 1.2714.
You will find all current economic events in our economic calendar.
This article was originally published on FX Empire