Week ending 1 May 2009: Continued fundamental data indicating a slowing rate of economic descent for several nations prompted consolidation for most currency pairs. A swine flu-induced outbreak of risk aversion early in the week saw safe-haven currencies rise, only to pare their gains before closing.

The RBA meets Tuesday, 5 May, and market opinion is split between a 25bps cut and steady rates. In a quiet data week, March private credit rose 0.1% m/m, April PMI fell to 30.1, and February leading indicator printed 0.2%. AUD/USD fell early in the week, but bounced from the 200-MA on four-hour charts near the psychological 0.7000 level and rose steadily to close at 0.7300, its highest level in 2009.

The FOMC met Wednesday and stayed their current course for both rates and quantitative easing. 1Q2009 GDP contracted −6.1% annualised, with personal consumption rising 2.2% q/q and core 1.5%. April manufacturing PMI rose to 40.1 and consumer confidence to 39.2.

The ECB meets Thursday, 7 May, and is expected to trim rates another 25bps and possibly to discuss QE methods suitable for the Eurozone. April retail PMI improved to 48.4, while April CPI printed 0.6% y/y and March unemployment rose to 8.9%. April confidence indicators all improved marginally, printing 67.2 economic, −31 consumer, −3.33 business climate, −35 industrial, and −24 services. March M3 tightened to 5.1% y/y. EUR/USD also fell early, but could not hold losses below 1.3000 and recovered to close at 1.3265.

The BoE meets Thursday, 7 May, with no change expected to either interest rates or QE. April distributive trades index surprised strongly to the upside, improving to 3 from −44, as manufacturing PMI printed 42.9 and consumer confidence −27. April Nationwide housing prices improved to −15.0% y/y; however, March lending secured on dwellings printed only £0.8Bn. EUR/GBP dipped back below 0.9000, closing at 0.8894, while GBP/USD rose steadily through the week on stabilising data, closing at 1.4911.

Canada’s February GDP printed −0.1% m/m and March raw materials prices rose 12.1% m/m. USD/CAD declined on improving commodities prices, closing at 1.1855, the lowest since 9 January, while AUD/CAD consolidated between 0.8550 and 0.8775.

The RBNZ met 30 April and cut rates 50bps to 2.5%, as expected, also committing to keeping rates unchanged or below that level until 2H2010. The March trade balance printed a surplus of NZ$324.0M and April NBNZ business confidence improved to −14.5, while March M3 tightened to 7.1% y/y. NZD/USD range-traded between 0.5525 and 0.5775, while AUD/NZD surged on the rate cut, closing at 1.2802.

The BoJ met 29 April and maintained a steady course for both rates and QE. March retail trade fell −1.1% m/m, −3.9% y/y, and CPI fell −0.3% y/y, 0.1% ex fresh food and −0.3% core. March unemployment rose to 4.8%. April PMI improved to 41.4, with March industrial production rising 1.6% m/m, down −34.2% y/y, and vehicle production down −50.0% y/y. March housing starts fell −20.7% y/y, with construction orders down −37.8% y/y. USD/JPY and AUD/JPY both fell on the pandemic scare but rose following, closing at 99.25 and 72.46, both above the 200-MA on daily charts. EUR/JPY also tracked the general risk aversion pattern, rising to close at 131.66.