Australian Dollar (AUD) Buoyed by Upbeat Business Confidence
The Australian Dollar (AUD) made gains against a handful of currencies on Tuesday afternoon as currency traders were undeterred by increased tensions between the United States and China.
The ‘Aussie’ also received an upswing of support after NAB’s business confidence data improved more than expected, rising from -20 to 1 in June.
Looking ahead, AUD could extend yesterday’s gains if July’s Westpac consumer confidence rises higher than forecast.
Pound (GBP) Struggles as Economy Takes Disappointing First Steps Towards Recovery
The Pound (GBP) suffered losses on Tuesday despite data showing the country took its first steps towards a recovery from the coronavirus-induced recession.
However, the weaker-than-expected rebound left markets disappointed, with GDP rising by just 1.8% following a record contraction of -20.3% just a month earlier.
Sterling could extend yesterday’s losses if today’s inflation rate disappoints, and shows monthly inflation was close to stagnation in June despite the lifting of lockdown measures.
Euro (EUR) Gains Despite Worsening German Investor Sentiment
The Euro (EUR) edged higher against a handful of currencies during yesterday’s session despite data revealing German investor sentiment fell in July. The latest data from the bloc’s largest economy showed investor sentiment worsened, highlighting Germany still has a long road to recovery.
Looking ahead, the single currency could give up some of its recent gains following a speech from the Bundesbank’s Johannes Beermann if he highlights the latest downbeat data from the bloc’s largest economy.
US Dollar (USD) Gives Up Earlier Gains as Inflation Rebounds
The US Dollar (USD) gave up Tuesday morning’s gains in the afternoon as risk appetite rebounded and markets seemed largely unfazed by the deterioration in US-China relations.
Meanwhile, sentiment was offered further support after data showed US consumer prices jumped 0.6% month-on-month, the most in close to eight years in June as businesses across the country reopened.
Today could see the ‘Greenback’ continue to slide if risk appetite improves and traders continue to flock to riskier assets.
Canadian Dollar (CAD) Struggles Ahead of BoC Decision
The Canadian Dollar (CAD) was mixed on Tuesday, rising against the Pound and the New Zealand Dollar but struggling against a handful of other currencies.
The ‘Loonie’ was unable to make significant gains as oil prices fell and traders worried the surge in coronavirus cases would threaten a recovery in oil demand as OPEC+ prepare to ramp up production from August.
Looking ahead, traders will focus on the Bank of Canada’s (BoC) interest rate decision and monetary policy statement. If the BoC is overly dovish, it will send the ‘Loonie’ lower.
New Zealand Dollar (NZD) Slides as NZ Visitor Arrivals Plummet
The New Zealand Dollar (NZD) slumped on Tuesday after data revealed the number of people that arrived in New Zealand plummeted to the lowest for any month since 1959 in May due to coronavirus border restrictions. Meanwhile, growing geopolitical tensions also weighed on the currency.
Looking ahead, if relations between the US and China deteriorate further it will weigh on the risk-sensitive ‘Kiwi’.
Upcoming Data
July 15 10:30 AUD Westpac Consumer Confidence (July) 96
July 15 16:00 GBP Inflation Rate (June) 0.6%
July 15 18:00 EUR Bundesbank Beermann Speech
July 16 00:00 CAD BoC Interest Rate Decision 0.25%
July 16 00:00 CAD BoC Monetary Policy Report