Australian Dollar (AUD) Supported as Retail Sales Rebound

Australian Dollar (AUD) Buoyed by Rebound in Sales

The Australian Dollar (AUD) rose at the end of last week’s session after the country’s retail sales saw a record rise in May as Australia eased lockdown restrictions.

The easing of restrictions allowed entire sectors to reopen and sparked a recovery after April’s historic plunge in sales. May’s strong bounce back suggests consumer spending will not be as weak as feared, offering hope Australia will be able to swiftly recover from its first recession in three decades.

Looking ahead, the Australian Dollar could edge higher following the release of today’s upbeat ANZ job advertisements.

Pound (GBP) Heads for First Weekly Gain in Four Weeks

The Pound (GBP) was mixed at the end of the week as it headed for its first weekly gain against its main rival, the US Dollar in four weeks.

Sterling edged higher after investors said the post-Brexit trade negotiations between the UK and European Union ended on an optimistic note despite Friday’s meeting being cancelled, although meetings are due to resume this week.

The Pound could receive an upswing of support today if June’s construction PMI jumps higher than expected and activity returns closer to the no-change 50 mark.

Euro (EUR) Struggles Despite Bloc’s Services Slump Easing

The Euro (EUR) remained under pressure on Friday despite data showing the slump in Eurozone business activity eased in June as businesses were able to reopen after the coronavirus lockdown.

However, while activity increased it still remained in contraction territory and far below levels seen before the crisis hit the bloc.

Euro traders will be focused on today’s construction PMIs from around the Eurozone and the bloc’s latest retail sales data. If data is upbeat and signals the bloc is recovering from the crisis, EUR will rise.

US Dollar (USD) Quiet as US Markets Closed for 4 July

The US Dollar (USD) struggled at the end of the week while coronavirus cases surged in the country.

The upbeat US payrolls data supported risk appetite, weighing on the appeal of the safe-haven US dollar as traders balanced hopes for a swift economic recovery with record coronavirus cases in the United States. Added to this, it was a quiet day as US markets were closed for 4 July public holiday on Friday.

The US Dollar could slide later today if the latest US PMI surveys rise higher than expected. If the services sector returns to growth, it will boost risk appetite and traders could move away from the safe-haven ‘Greenback’.

Canadian Dollar (CAD) Slumps as Oil Prices struggle around $40

The Canadian Dollar (CAD) suffered losses on Friday as oil struggled at $40 a barrel due to increasing fears high numbers of Covid-19 cases could cause the recovery in fuel demand to slow.

The world’s largest oil consumer, the USA, reported more than 55,000 new coronavirus cases on Thursday in a fresh daily record for the crisis.

The ‘Loonie’ could suffer losses today if the Bank of Canada’s (BoC) business outlook survey is overly dovish due to the coronavirus.

New Zealand Dollar (NZD) Buoyed by US Jobs Data

The New Zealand Dollar (NZD) benefitted at the end of the week, supported by the previous day’s upbeat US jobs data which suggested the economy is on track for a swift recovery despite growing coronavirus cases.

Looking ahead, risk appetite and worries surrounding record high coronavirus cases in the US could prevent the ‘Kiwi’ from making significant gains today.

 

Upcoming Data

6 July 12:30         AUD       ANZ Job Advertisements (June)                 0.8%

6 July 17:00         EUR        German Factory Orders (May)                    14.5%

6 July 18:30         EUR        Construction PMI (June)                                46

6 July 18:30         EUR        German Construction PMI (June)              45

6 July 19:30         GBP       Construction PMI (June)                                45

6 July 20:00         EUR        Retail Sales (May)                                            14.8%

7 July 00:45          USD       Services PMI (June)                                         46.7

7 July 00:45          USD       PMI Composite (June)                                   46.8

7 July 01:00         USD       ISM Non-Manufacturing PMI (June)         49

7 July 01:30         CAD       BoC Business Outlook Survey

Louisa Heath

louisa.heath@torfx.com


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