Australian Dollar (AUD) Rises on Hopes for Coronavirus Vaccine
The Australian Dollar (AUD) edged higher against a handful of currencies at the start of the week as traders remained cautiously optimistic.
Hopes for a coronavirus vaccine and development of drugs to help lower the mortality rate supported the risk-sensitive Australian Dollar.
Looking ahead, the ‘Aussie’ could extend its gains today following the release of NAB’s business confidence data. If confidence improves significantly it will buoy the Australian currency.
Pound (GBP) Suffers as 25% of Companies Not Prepared for Brexit
The Pound (GBP) remained under pressure on Monday despite reports revealing the British currency has been the second-best performer in July thanks to fiscal stimulus and hopes of an economic rebound.
However, Sterling struggled as markets continued to worry about the UK’s departure from the European Union. Data from the Institute of Directors showed that only a quarter of companies were ready for the end of the transition period.
Looking ahead, GBP could suffer further losses if the latest UK GDP growth figures show the British economy contracted at a faster pace than expected in May.
Euro (EUR) Boosted as Germany Passes Lowest Point in Recession
The Euro (EUR) picked up on Monday, rising higher against a handful of currencies after the German government said the economy has turned a corner in the coronavirus-induced recession.
The upbeat statement from the bloc’s largest economy said Germany had now passed the lowest point in the recession, meaning the recovery process has now begun.
The single currency could make some gains today if the latest German inflation rate picks up more than expected in June.
US Dollar (USD) Slides on Cautiously Optimistic Tone
The US Dollar (USD) slumped at the start of the week as investors assessed upcoming global economic data and US corporate earnings to decide whether the current cautiously optimistic tone is justified.
Sentiment improved as investors believed the worst is now over, despite growing cases in the US. The weekend saw coronavirus cases surge once again, with Florida reporting a record 15,000 cases in 24 hours, surpassing the peak hit in New York several months ago.
Looking ahead, US inflation data will drive movement in the ‘Greenback’ tomorrow and provide an insight into the world’s largest economy’s recovery.
Canadian Dollar (CAD) Struggles Ahead of OPEC Meeting
The Canadian Dollar (CAD) struggled against the Euro and Australian Dollar but made gains against a handful of currencies. However, ‘Loonie’ gains were capped as oil slumped close to 1% during yesterday’s session as traders awaited the latest OPEC meeting.
Looking ahead, CAD could make gains as OPEC is due to meet on Tuesday and Wednesday. If the group of oil producers agree on further cuts it could offer oil markets further support and boost prices.
New Zealand Dollar (NZD) Slides on RBNZ Negative Rate Speculation
The New Zealand Dollar (NZD) suffered losses against a handful of currencies, although was able to make gains against the safe-haven US Dollar as traders opted for riskier assets.
However, the ‘Kiwi’ was left under pressure as the Reserve Bank of New Zealand (RBNZ) is said to be keeping all options on the table. Negative rate speculation has weighed on the New Zealand Dollar and could continue to do so during today’s session.
Upcoming Data
July 14 11:30 AUD NAB Business Confidence (June) -15
July 14 16:00 EUR German Inflation (June) 0.9%
July 14 16:00 GBP GDP (May) -17%
July 14 22:30 USD Inflation (June) 0.5%
July 14 22:30 USD Core Inflation (June) 1.2%