Australian Dollar Subdued as US-China Trade Remains in Focus
The Australian Dollar was left on the defensive on Thursday as a risk-off mood continued to dominate markets as the threat of more punitive tariffs loomed over the US-China trade talks as they resumed in Washington.
Outside of the US-China trade dispute AUD investors are likely to be focused on the publication of the Reserve Bank of Australia’s (RBA) statement on monetary policy today, with a cautious outlook from the bank likely to apply further pressure to the ‘Aussie’.
Pound to Rally as GDP Surges?
The Pound (GBP) was left to nurse its recent losses on Thursday, with Sterling left muted against the majority of its peers as political uncertainty in the UK continued to dampen GBP sentiment.
This was mostly driven by concerns regarding the state of the cross-party Brexit talks, with opposition leader Jeremy Corbyn playing down recent reports of progress as he spoke of the difficulty of ‘negotiating with a disintegrating government’.
However, the Pound stands to rally later this evening, with the UK’s GDP report expected to show domestic growth surged from 0.2% to 0.5% in the first quarter of 2019.
Euro Climbs to One-Week High
Despite a lull in Eurozone data, the Euro enjoyed board gains towards the end of the European session on Thursday as a slight pull back in the US Dollar ahead of the US-China trade talks bolstered EUR.
Meanwhile, the Euro may struggle to find support today as Germany’s latest trade figures are expected to report that exports from the Eurozone’s largest economy continued to contract in March.
US Dollar Steady with Trade Talks in Focus
The US Dollar was left in a holding positon throughout yesterday’s session, with investors reluctant to alter their positions in USD as US-China trade talks continued. These talks were seen as particularly key as they would determine whether the US pressed forward with plans to hike tariffs, in what would be a major escalation of trade tensions.
In the sights for USD investors at the end of this week will be the publication of the latest US CPI figures, with the US Dollar likely to extend its recent gains if domestic inflation ticked higher in April as forecast.
Canadian Dollar Flat as Canadian Trade Deficit Expands
The Canadian Dollar traded in a narrow range throughout Thursday’s session, with the ‘Loonie’ left muted after the domestic trade deficit unexpectedly expanded in March.
Coming up later today will be the release of Canada’s latest employment figures, which could give a leg up to CAD if employment expanded last month as forecast.
New Zealand Dollar Flat as Trade Risks Dampen Sentiment
The New Zealand Dollar also showed few signs of life yesterday, with investors shying away from the risk-sensitive ‘Kiwi’ as markets remained rattled by the prospect of the US escalating trade tensions by hiking tariffs against China.
Data Releases
May 10th 08:45 NZD Electronic Retail Card Spending (Apr) 0.8%
May 10th 11:30 AUD RBA Statement on Monetary Policy
May 10th 16:00 EUR German Trade Balance (Mar) €20bn
May 10th 18:30 GBP GDP (Q1) 0.5%
May 10th 18:30 GBP Business Investment (Q1) -0.6%
May 10th 18:30 GBP Trade Balance (Mar) £-2.7bn
May 10th 18:30 GBP Industrial Production (Mar) 0.1%
May 10th 22:30 CAD Unemployment Rate (Apr) 5.8%
May 10th 22:30 USD Inflation Rate (Apr) 2.1%