5 April, AtoZForex, Lagos – Starting out the day, we had the trade balance report from Australia, as well as the interest rate decision from the Reserve Bank of Australia (RBA). As expected, the central bank opted to leave the rates at 2.00%. Governor Glenn Stevens pointed out that the available information suggests that the economy is continuing to rebalance following the mining investment boom. Consistent with developments in the labour market, overall GDP growth picked up over 2015, despite the contraction in mining investment. The pace of lending to businesses has also picked up. Inflation is quite low. Recent information has confirmed that growth in labour costs remains quite subdued. Australia is likely to remain low over the next year or two.
The trade balance on the other hand showed the balance on goods and services was a deficit of $3,410m in February 2016, an increase of $254m (8%) on the deficit in January 2016.
For the rest of the day, we still have key data like the UK services PMI, as well as Canada trade balance and the US ISM Non-Manufacturing PMI.
UK Services PMI (8:30 A.M GMT)
The previous weak reading in the services PMI showed confidence among the UK’s services businesses had taken a hit, knocking their growth to a three-year low. This could be attributed to growing concerns about the EU referendum, turmoil on financial markets and a faltering global recovery. The data is now forecast for a rebound to 53.9 from 52.7 in the previous month. The pound looks set to continue its bearish trend against he dollar, with a negative reading here likely to push the GPBUSD pair further down.
Canada Trade Balance (12:30 P.M GMT)
The last trade balance report showed Canada’s merchandise trade deficit with the world widened from $631 million in December to $655 million in January. Canada’s imports increased 1.1% in January to $46.7 billion. Import volumes increased 1.6% while prices were down 0.5%. Exports totaled $46.0 billion, up 1.0% from December. Export volumes rose 3.6% and prices declined 2.5%. The latest report is forecast to show a 0.9 surplus.
ISM Non-Manufacturing PMI (2:00 P.M GMT)
The ISM Non-Manufacturing PMI is a Survey of purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. It is forecast to show a 54.1 reading. The dollar has found some renewed strength this morning and is likely to strengthen further. A positive reading here would added momentum to the renewed dollar strength.
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