Australian Dollar Stabilises on USD Weakness
The Australian Dollar traded robustly on Friday, with the currency finding support as market risk appetite was boosted by the fall in the US Dollar. However the upside in the ‘Aussie’ was limited somewhat by a continued slump in commodity prices.
Looking to the week ahead, AUD investors will likely be focusing on the latest domestic employment figures. A decline in unemployment may weaken the case for the Reserve Bank of Australia (RBA) to lower interest rates again this year.
Pound Flat as May Steps Down
The Pound (GBP) was mostly flat at the end of last week’s session as Theresa May stepped down as leader of the Conservative party. Sterling benefited from the result of the Peterborough by-election, which saw the Labour party narrowly hold the seat, preventing the Brexit party from putting its first MP into parliament.
Coming up today we have the release of the UK’s latest GDP figures, which are likely to dampen the appeal of Sterling as economists forecast growth will have contracted for a second consecutive month in April.
Euro Mixed Following Gloomy German Data
EUR exchange rates were muted on Friday as markets reacted to Germany’s latest industrial production figures. This saw a sharper-than-expected contraction in industrial production strip the single currency of some of Thursday’s gains as it stoked concerns that the Eurozone’s largest economy could stagnate or even fall into a recession in 2019.
Looking ahead, a lull in notable Eurozone data through the first half of the week could see EUR investors turn their focus back to Italy and its debt feud with the EU.
US Dollar Sinks on Weak US Payrolls
The US Dollar limped over the finishing line last week, with the ‘Greenback’ weakening in the wake of some softer-than-expected US Payroll figures. US Payrolls came in at just 75,000 in last month, further fueling speculation that the Federal Reserve will cut interest rates this year to prevent a slowdown in the US economy.
In focus for USD investors at the start of this week will be the latest JOLTs job data, with a drop in new job openings likely to keep the pressure on the US Dollar.
Canadian Dollar Buoyed as Unemployment Strikes Record Low
The Canadian Dollar drifted higher on Friday, boosted by Canada’s latest employment report, which revealed domestic unemployment fell to 5.4%, the lowest levels since records began in 1976.
New Zealand Dollar Boosted by Rising Risk Appetite
The New Zealand Dollar proved to be the main beneficiary of the drop in the US Dollar at the end of last week’s session, with the appeal of the ‘Kiwi’ being bolstered by hopes the Fed will need to cut rates by the end of the year.
Data Releases
June 10th 18:30 GBP Trade Balance (Apr) £-3.2bn
June 10th 18:30 GBP GDP (Apr) -0.1%
June 10th 18:30 GBP Industrial Production (Apr) -0.7%