mask Dollar Surges at 80% Rate Hike Probability

02/ 03/ 2017

Dollar Surges at 80% Rate Hike Probability

Daily Update - 02nd March 2017

Yesterday's Market

  • AUD Gross Domestic Product
  • EUR Markit Manufacturing PMI, Unemployment Change, Unemployment Rate, Consumer Price index & Harmonized Index of Consumer Prices
  • GBP Markit Manufacturing PMI, Consumer Credit & Mortgage Approvals
  • USD Personal Spending, Personal Income, Markit Manufacturing, ISM Manufacturing, ISM Prices Paid, Construction Spending
  • USD Speeches from FOMC Members – Kaplan & Brainard

Yesterday Explained

Australian GDP figures showed a growth of 0.5% from last quarter which supported Aussie dollar to strengthen. Euro declined against the dollar on Wednesday as the greenback strengthened after hawkish comments from two Federal Reserve officials late on Wednesday increased expectations that Feds are closer to raising interest rates. 

Sterling declined to hit 12 day low against the dollar on Wednesday as sterling came under selling pressure after weaker-than-expected batch of economic data added to political nerves that have begun to weigh on the currency again after last year's Brexit vote. A survey of manufacturing purchasing managers on Wednesday showed the factory sector holding on to much of its post-Brexit vote momentum while growing more slowly in February than expected.

On the data front, U.S. consumer price inflation jumped in January by 0.4 percent, while ISM manufacturing reporting better than expected figures. Furthermore President Trump stuck to the script in his first speech to Congress yesterday, promising deregulation, tax cuts and higher infrastructure spending without any of those pesky details that could spoil the fun. U.S. Treasury yields rose broadly on Wednesday on increased expectations that the Federal Reserve will raise U.S. interest rates at its March meeting which is now at 80% probability.

Today’s Market

  • AUD Exports, Imports & Trade Balance
  • GBP PMI Construction
  • EUR Unemployment Rate, Consumer Price Index, Producer Price Index
  • USD Initial Jobless Claims
  • CAD Gross Domestic Product & BOC Governor Council Member Lane’s Speech

Today’s Focus

Day will start with Imports & Exports reports from Australia which will be followed by Trade Balance report. This shows the difference in the value of its imports and exports of Australian goods. UK will then release PMI construction which shows business conditions in the UK construction sector. This will be followed by Key economic reports from Euro zone where main focus will be on Unemployment Rate, Consumer Price Index & Producer Price Index.

The only report to come out from USA will be Initial Jobless claims which is a measure of the number of people filing first-time claims for state unemployment insurance. The day will end with Gross Domestic product figures from Canada which will be followed by a speech from BOC Governor Council Member Lane.