Australian Dollar Rises despite Looming Threat of Second Wave

Australian Dollar (AUD) Fluctuates as Risk Appetite Improves

The Australian Dollar (AUD) clawed back some losses during Thursday’s session despite rising trade tensions and the growing threat of a second wave of the coronavirus pandemic as infections continued to soar around the world.

Traders will continue to monitor market sentiment and if there is another downturn in risk appetite, it will send the ‘Aussie’ lower.

Pound (GBP) Dips as British Retailers Remain Gloomy

The Pound (GBP) was mixed on Thursday, making gains against a weaker Euro but suffering losses against riskier assets. The morning saw Sterling rise as traders bought back into the currency despite second wave and Brexit related worries.

Meanwhile, data from the CBI showed retailers remained extremely gloomy about the prospects of the economy reopening this summer. Over 60% of retailers expect demand to be weak, which sent GBP lower.

Sterling could trade lower today if markets are pessimistic about next week’s upcoming post-Brexit talks between the UK and EU.

Euro (EUR) Slides as US-EU Trade Tensions Heat Up

The Euro (EUR) tumbled against a handful of currencies during yesterday’s session as tensions between the European Union and United States heated up.

Brussels has hit back at Washington after threats the US will slap $3.1 billion of European goods with new tariffs. The announcement from the US promoted an angry response from the bloc, that argued these tariffs would be ‘very damaging’.

Looking ahead, the single currency could make slight gains if both France’s and Italy’s consumer confidence improves more than forecast in June.

US Dollar (USD) Gives Up Gains as US Labour Market to Take Years to Recover

The US Dollar (USD) slumped against riskier assets during yesterday’s session despite making gains that morning as doubt about a global economic recovery crept in.

Meanwhile, further data showed initial jobless claims remained at extraordinarily high levels, suggesting the US labour market could take years to recover. However, data revealed US durable goods orders rebounded in May, recouping a portion of two months’ worth of decline.

Risk appetite could take a hit today and boost USD if May’s US personal income and spending data disappoints.

Canadian Dollar (CAD) Slides as Canada Loses AAA Rating

The Canadian Dollar (CAD) edged higher against a handful of currencies but struggled against riskier assets.

The ‘Loonie’ was able to make gains despite oil tumbling below $40 a barrel on Thursday. Record high US crude inventories and an increase in Covid-19 cases sparked doubt about a recovery in oil demand. Added to this, Canada became the first country to lose its AAA rating due to coronavirus government spending.

Looking ahead, the ‘Loonie’ will continue to react to any further movement in oil prices.

New Zealand Dollar (NZD) Edges Higher despite Resurgence of Covid-19 Cases

The New Zealand Dollar (NZD) edged higher on Thursday afternoon despite growing fears of a second wave of the coronavirus and heightened tensions between the US and EU.

Looking ahead, any further moves from the US that weigh on risk appetite and downbeat New Zealand consumer confidence will see the ‘Kiwi’ reverse today’s gains.

 

Upcoming Data

26 June 08:00                     NZD                       ANZ Roy Morgan Consumer Confidence (June)   98.5

26 June 17:45                     EUR                        France Consumer Confidence (June)                       94

26 June 20:00                     EUR                        Italy Consumer Confidence (June)                            99.1

26 June 20:00                     EUR                        Italy Business Confidence (June)                                78.6

26 June 23:30                     USD                       Personal Income (May)                                                 -5.6%

26 June 23:30                     USD                       Personal Spending (May)                                              9.5%

Louisa Heath

louisa.heath@torfx.com


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