As expected, Governor Lowe reaffirmed that the interest rate for the Australian Dollar will remain at 1.5% for now. The cited reasons are the promising economic outlook with low inflation, but still sluggish employment rate. Consumer and business confidence have grown with exports being high and mining investments picking up again. The labor and housing markets were the only concerns at the meeting.
In contrast, the EUR took a plunge as the heating French elections are coming. After Alain Juppé backed down from the race and left François Fillon the French Republican party's candidate, the EUR saw drop. After the currency reached a level of 1.06200 when the markets closed on Friday, it now stands at 1.05850 – a decrease of 0.33% so far.
Janet Yellen proposed a rate hike mid-March. With an economy growth of around 2 percent and satisfactory levels of inflation, the FED is ready to proceed with lifting the interest rate above the 0% level. The most critical information will be the employment report on the 10th of March, after which a decision will be taken on the 15th of the same month.
The market is all but certain a FED interest rate increase will occur.
Watch out currencies for today are also the Loonie and the Kiwi. Information on the Canadian trade balance will be released later today. The estimates place it at 0.2B, lower than the previous 0.9B.
The New Zealand GDT Index – the index for globally traded dairy products showed a decrease of 3.2% in the previous bi-weekly auction. It did, however, come after an overall increase of the index during the previous year.