Australian Dollar Undermined by Dovish Lowe Comments
The Australian Dollar was placed on the defensive on Thursday wake of some dovish comments from Reserve Bank of Australia (RBA) Governor Philip Lowe. These comments saw Lowe state that the bank is ‘prepared to provide additional support by easing monetary policy further’, stoking expectations that a third rate cut could be implemented this year.
In the absence of any notable economic data today, we are likely to see the ‘Aussie’ left vulnerable to external influences, with AUD exchange rates potentially weakening if fears of a global slowdown are stoked by some gloomy US GDP figures.
Pound Sterling (GBP) Steady Following Boris Johnson’s Statement
The Pound (GBP) was broadly stable yesterday as Boris Johnson made his first statement to parliament as UK Prime Minister. While Johnson used his address to reaffirm his commitment to pulling the UK out of the EU in October, it appears that his claim that the UK is better prepared for a no-deal Brexit than many believe was able to quell any immediate jitters in GBP.
With the UK having exhausted its data for the week, the focus today will likely remain on UK political headlines as Johnson hopes to hit the ground running with his ambitious policy proposals.
Euro Accelerates on Draghi Comments
The Euro (EUR) struck higher on Thursday, as the single currency enjoyed broad gains in the wake of the European Central Bank’s (ECB) latest policy meeting. While the ECB’s forward guidance may have dovish, the Euro bounced back its initial losses following Mario Draghi’s accompanying press conference, in which the ECB President suggested that there was no discussion of lowering cutting rates this month.
In the absence of any other notable data this week we may see EUR exchange rates trade narrowly as markets continue to digest the ECB’s decision and what it may mean for the Euro in the months to come.
US Dollar Muted despite Rise in US Durable Orders
The US Dollar (USD) remained mostly flat yesterday in spite of data showing that US durable goods orders shot up 2% in June. The muted reaction in USD was likely down to a revision in May’s reading which saw orders revised down from -1.3% to -2.3% as well as the uptick in the Euro, which further limited appetite for the US Dollar.
In the spotlight for currency markets today will be the publication of the latest US GDP figures, with an expected slowdown in economic growth in the second quarter likely to see the US Dollar limp over the finishing line this week.
Canadian Dollar Steady as Oil Prices Accelerate
The Canadian Dollar (CAD) remained steady throughout Thursday’s trading session, with the oil-sensitive ‘Loonie’ holding its ground thanks to a bullish pick up in crude prices
New Zealand Dollar Slips on RBA Easing Concerns
The New Zealand Dollar (NZD) trended lower yesterday, falling in sympathy with the Australian Dollar after RBA Governor Philip Lowe hinted at further cuts from Australia’s central bank, stoking concerns the Reserve Bank of New Zealand (RBNZ) could follow suit with its own cuts.
Data Releases
July 26th 22:30 USD GDP (Q2) 1.8%