Australian Dollar (AUD) Slips as RBA Cautiously Optimistic
The Australian Dollar (AUD) suffered losses on Tuesday after the Reserve Bank of Australia (RBA) held interest rates at an all-time low. While the decision was expected, the bank sounded cautiously optimistic about the reopening of the economy.
However, AUD slumped after lockdown measures were reimposed in Melbourne, confining residents to their homes for six weeks and causing concerns over a second wave of coronavirus.
Investors also remained cautious as coronavirus cases surged in the US, and it is likely this will remain in focus today. If risk appetite slides further, it will send the ‘Aussie’ lower.
Pound (GBP) Near Three-Week Highs Ahead of Budget Speech
The Pound (GBP) remained near three-week highs against the US Dollar and made gains against the Euro yesterday.
Traders remained upbeat ahead of further details on Boris Johnson’s government’s plans to support the economy. However, data showed consumers remain cautious as the number of shoppers visiting retailers was 50% lower last week compared to data from just a year earlier, suggesting the UK economy has a lot of ground to make up.
Looking ahead, Pound traders will be focused on today’s supplementary Budget from Chancellor Rishi Sunak. If Sunak announces further stimulus measures, it could send the British currency higher.
Euro (EUR) Struggles as EC Forecasts Deeper Recession
The Euro (EUR) remained largely muted on Tuesday after the European Commission said the Eurozone was set to fall into a deeper recession than first thought.
The EC also said the bloc would take longer to rebound than initially forecast as some of the largest economies in the bloc including France, Italy, and Spain are struggling due to the pandemic. This largely offset upbeat data from the bloc’s largest economy which showed a rebound in industrial production.
Looking ahead, a speech from the Bundesbank’s vice President, Claudia Buch could offer the single currency some support if she makes some bullish comments.
US Dollar (USD) Rises on Surging Coronavirus Cases
The US Dollar (USD) edged higher against a handful of currencies as the resurgence of coronavirus cases sent traders flocking to the safety of the ‘Greenback’. Florida’s Miami became the latest hotspot to pause reopening its economy as cases surged and the country’s death toll hit 130,000.
The US Dollar could continue to make gains today if traders remain overly cautious and coronavirus cases continue to surge.
Canadian Dollar (CAD) Slumps as Coronavirus Surge Weighs on Oil Prices
The Canadian Dollar (CAD) suffered losses during Tuesday’s session as markets worried about the growing number of coronavirus cases in the United States.
Oil markets worried the surge in Covid-19 cases would hamper the recovery in fuel demand as the world’s largest fuel consumer continued to report high levels of cases. If oil prices and demand both fall it will send the ‘Loonie’ lower against a handful of currencies today, although upbeat housing starts data for June could provide CAD some support.
New Zealand Dollar (NZD) Falls as Riskier Assets Take a Breather
The New Zealand Dollar (NZD) edged lower during yesterday’s session as riskier assets took a breather. Markets refocused on the growing coronavirus cases in the United States and local lockdowns in some countries which weighed on risk appetite.
Looking ahead, the ‘Kiwi’ could continue to slide if risk appetite continues to decline.
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8 July 21:00 GBP Supplementary Budget
8 July 22:15 CAD Housing Starts (June) 210K
9 July 03:45 EUR Bundesbank Buch Speech