AUD Exchange Rate News: Australian Dollar Finds Fleeting Gains as Chinese PMI Impresses

Australian Dollar (AUD) Offered Tentative Gains by Robust Chinese PMI data

The Australian Dollar (AUD) enjoyed some brief support through the start of Tuesday’s trading session as AUD investors welcomed some stronger-than-expected manufacturing PMI data from China on hopes it will fuel demand for Australian exports.

The ‘Aussie’ struggled to hold on to these gains during the European session, however, as growing coronavirus concerns soured market risk appetite.

Looking ahead, we may see a similar trend become apparent today as ongoing fears that parts of the world could re-enter lockdown is likely to limit any upside from Australia’s own manufacturing PMI release this morning.

Pound (GBP) Recovers Following Johnson’s ‘Ambitious’ Recovery Plan

The Pound (GBP) initially stumbled at the start of yesterday’s European session as the UK’s final GDP release for the first quarter saw UK economic growth revised down from –2% to –2.2%.

Sterling was later able to pare these losses in response to a speech by Boris Johnson, in which the PM set out his post-coronavirus recovery plan and vowed to fix longstanding economic problems in the UK.

However, GBP exchange rates may come under renewed pressure through today’s session in light of flare ups of coronavirus cases in parts of the UK as well as ongoing Brexit uncertainty.

Euro (EUR) Buoyed by Stronger-than-Expected Inflation

The Euro (EUR) ticked higher on Tuesday, with the single currency strengthened by the Eurozone’s latest CPI figures as they revealed inflation in bloc rose to 0.3% in June. This beat forecasts for a more modest 0.1% rise and fed into recent optimism that the Eurozone economy is on track to recover in the third quarter.

Looking ahead, the Euro may be in line for additional gains later this evening, after Germany reported a rebound in retail sales growth last month.

US Dollar (USD) Steady as Coronavirus Concerns Dominate Markets

The US Dollar (USD) remained well supported through yesterday’s trading session as growing concerns over the resurgence of the coronavirus continued to funnel investors towards the safe-haven currency.

As US cases continue to rise at an alarming pace and more countries are reporting localised spikes, the risk of the world going back into lockdown is looking increasingly likely, undermining hopes for a rebound in global growth in the second half of the year.

Meanwhile, the focus for USD investors today will be on the latest ISM manufacturing PMI. Will the US Dollar rally in response to robust US factory activity last month?

Canadian Dollar (CAD) Weakens as Canada Suffers Record Fall in GDP

The Canadian Dollar (CAD) trended lower overnight on Tuesday, in response to some gloomy GDP figures which revealed domestic growth slumped a record 11.6% during the month of April.

New Zealand Dollar (NZD) Struggles as Risk Appetite Weakens

The New Zealand Dollar (NZD) closed yesterday’s session with modest losses, as the ‘Kiwi’s initial gains were undermined by rising concerns over a second wave of coronavirus infections and its impact on global growth this year.

 

Data Releases

July 1st 09:00

 

AUD Manufacturing PMI 49.8
July 1st 17:55

 

EUR German Unemployment Rate (Jun) 6.6%
July 1st 18:00

 

EUR Manufacturing PMI (Jun) 46.9
July 1st 18:30

 

GBP Manufacturing PMI (Jun)

 

50.1
June 3rd 22:15

 

USD ADP Employment Change (Jun) 3,000,000
June 4th 00:00

 

USD

 

ISM Manufacturing PMI (Jun) 49.5
Louisa Heath

louisa.heath@torfx.com


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