US economy slowing faster than forecast

The?US?economy grew just 1.6% in the first three months of the year?when?compared to the same.?In 2023.?That is significantly lower than the 3.4% we saw in the last quarter of 2023 and below the market expectations of 2.5%. Interestingly, the quarterly?rise in prices?was above expectation at 3.1%, so there is still some upward pressure in the?US?economy. As a result, the poor GDP data didn't harm the?US?dollar as much as expected and the?GBP/USD?rate starts Friday at $1.2500;?roughly where it was?at this time?yesterday. The?EUR/USD?rate has moved a little higher. This pair sits at 1.0727 this morning. Today's?U.S.?data includes?core?Personal Consumption Expenditure (PCE) Price Index, something that the?US?Federal Reserve watches very closely for indications of spending capacity.?This data has been?rather?directionless of late?but?the markets are expecting an uptick to an annualised 2.6% in this index.?Whether that will factor into the Federal Reserve's thinking as they contemplate interest rate cuts?is another matter.

Aussie PPI above forecast

Australian traders returned from their ANZAC day public holiday to data showing the producer price index rose by 4.3% in the year to March. That was up from 4.1% in the previous quarter and adds to the growing inflationary pressure the Reserve Bank of Australia?is having?to contend with. That hints at the RBA keeping their base rate higher for longer. Hence?the?Australian dollar has gained some strength overnight. The?GBP/AUD?rate is a cent lower at AUD 1.9120?and?we have no significant?UK?data today. So that downward trend may well trickle on. We will see Australian retail sales data and the trade balance next?week;?all potentially market-moving.?

Today's Major Economic Releases

06:00 JPY BoJ Press Conference?

2' CHF SNB's Chairman Jordan speech?

2' EUR ECB's De Guindos speech?

12:30 USD Core Personal Consumption Expenditures - Price Index

12:30 USD Personal Consumption Expenditures - Price Index?

12:30 USD Personal Income (MoM)(Mar)?

12:30 USD Personal Spending(Mar)?

14:00 USD Michigan Consumer Sentiment Index(Apr)?

14:00 USD UoM 5-year Consumer Inflation Expectation(Apr)?

Interbank Exchange Rates