Australian Dollar
Although global geopolitical tensions mounted ahead of the weekend the Australian Dollar was still able to hold onto a positive footing against many of the majors. As North Korea expressed a continued willingness to meet with the US for talks this helped to limit the sense of market risk aversion on Friday. As a result the downside pressure on AUD exchange rates was somewhat limited, even in the absence of supportive domestic data.
An uptick in the ANZ Roy Morgan weekly consumer confidence index could offer a fresh boost to the Australian Dollar this week.
Sterling
Investors were not impressed to find that the second estimate of the first quarter UK gross domestic product data confirmed the sharp slowdown in growth. As the economy expanded just 0.1% in the first three months of 2018 this naturally provoked concerns over its underlying health. This weaker showing is also likely to encourage the Bank of England (BoE) to leave interest rates on hold for longer, to the detriment of Pound exchange rates.
Lingering uncertainties over Brexit look set to keep Sterling under some degree of pressure in the near term.
Euro
The Euro found some relief as the German IFO business climate index unexpectedly held steady at 102.2 in May after falling for five months in a row. This gave investors fresh cause for confidence in the Eurozone’s powerhouse economy, even though sentiment failed to show any actual improvement on the month. However, as concerns remain over the next steps of Italy’s populist coalition this weighed down EUR exchange rates on Friday.
Political jitters are likely to remain a drag on the single currency in the coming days, especially if Italy appears to be on a collision course with EU spending rules.
US Dollar
A surprisingly sharp contraction in April’s US durable goods orders figure put renewed pressure on USD exchange rates during Friday’s European session. The weaker showing dented confidence in the outlook of the world’s largest economy, although this decline was largely driven by a plunge in aircraft orders. As the less volatile core figure showed a moderate uptick on the month the mood towards the US Dollar did not remain bearish for long.
After a relatively quiet start to the week the US Dollar will be looking to find further support on the back of the latest consumer confidence data.
Canadian Dollar
News that Russian and Saudi Arabia are prepared to begin easing supply curbs prompted the price of oil to trend lower. This continued to drag on the commodity-correlated Canadian Dollar ahead of the weekend, with markets nervous of the prospect of a renewed global oversupply glut. With Brent crude falling back below US$77 per barrel there was little in the way of support for CAD exchange rates.
Unless oil prices rebound the Canadian Dollar is likely to remain biased to the downside in the near term.
New Zealand Dollar
Confidence in the New Zealand Dollar picked up on Friday even though domestic data was lacking from the calendar. As market risk appetite generally recovered from the abrupt US decision to pull out of the planned summit with North Korea this helped to buoy NZD exchange rates. Even so, support for the ‘Kiwi’ remains somewhat fragile.
Ahead of the Reserve Bank of New Zealand’s (RBNZ) latest Financial Stability Report the mood towards the New Zealand Dollar is likely to sour.
Data Released
May 29th 09:30 AUD ANZ Roy Morgan Weekly Consumer Confidence Index (MAY 27)
May 30th 00:00 USD Consumer Confidence Index (MAY) 128