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AUD: Strong credit growth but policy view unchanged – BNY

BNY’s Head of Markets Macro Strategy Bob Savage notes Australia’s January financial aggregates show total credit up 0.5% month-on-month and 7.7% year-on-year, with housing and business credit both accelerating on an annual basis. Broad money growth has also picked up. However, he argues these figures are unlikely to alter the Reserve Bank of Australia’s current policy stance, leaving AUD/USD modestly firmer.

Credit expansion not shifting RBA stance

"Australia’s financial aggregates in January showed total credit rising 0.5% m/m, easing from 0.8% in December, while the y/y rate accelerated to 7.7% from 6.5% in January last year."

"Housing credit increased by 0.6% m/m and 7.0% y/y, compared with 0.7% m/m and 5.6% y/y previously."

"Business credit grew 0.5% m/m, down from 1.0%, with annual growth strengthening to 9.4% from 8.9%."

"Broad money expanded 0.6% m/m, up from 0.5%, and rose 7.4% y/y, compared with 5.2% a year earlier."

"The figures are unlikely to change the current RBA view on policy."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Canada GDP contracts 0.6% in Q4 vs. 0% expected

Canada's real Gross Domestic Product (GDP) contracted at an annualized rate of 0.6% (QoQ) in the fourth quarter, Statistics Canada reported on Friday. This print followed the 2.4% growth recorded in the previous quarter and came in below the market expectation of 0%.
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USD/CAD holds steady as US PPI beats forecasts, Canadian GDP contracts

USD/CAD trades around 1.3680 on Friday at the time of writing, virtually unchanged on the day, as investors digest a fresh batch of macroeconomic data from the United States (US) and Canada.
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