Australian Dollar (AUD) Buoyed by Coronavirus Vaccine Hopes
The Australian Dollar (AUD) made gains against a handful of currencies as risk sentiment improved on Wednesday. Hopes for a successful coronavirus vaccine sent traders flocking to the risk-sensitive ‘Aussie’.
However, weak Aussie consumer confidence regressed back to May’s levels in June after Victoria imposed a six-week lockdown due to a surge in coronavirus cases.
Looking ahead, the ‘Aussie’ could struggle to make gains today following the release of the latest employment data. Any higher-than-expected jump in unemployment will weigh on AUD.
Pound (GBP) Struggles Against Brexit and Coronavirus
The Pound (GBP) was mixed during yesterday’s session as while the currency was pushed higher due to a weaker US Dollar, analysts argue it faces further weakening due to Brexit and economic damage caused by the coronavirus.
However, GBP received a slight upswing of support after data showed consumer prices rose unexpectedly in June.
The latest UK employment statistics will remain in focus today as traders assess the damage the coronavirus pandemic has had on the country’s labour market.
Euro (EUR) Jumps to a Four-Month High
The Euro (EUR) benefitted on Wednesday on hopes European Union leaders will reach an agreement about the long-awaited coronavirus recovery fund during the EU leaders’ summit later this week. This boosted the single currency and pushed it to a four-month high against the already weak US Dollar.
Looking ahead, all eyes will be on the European Central Bank’s (ECB) interest rate decision this evening. A dovish ECB that focuses on the bloc suffering a deeper recession than first anticipated will dampen single currency sentiment today.
US Dollar (USD) Slides to One-Month Low
The US Dollar (USD) slumped during yesterday’s session as risk appetite improved and the US currency weakened. Signs of progress in the hunt for a coronavirus vaccine boosted riskier assets and sent USD to a one-month low.
Meanwhile, data revealed that US import prices increased more than forecast in June, but the overall trend continued to remain weak.
However, the ‘Greenback’ could claw back some losses during today’s session following the release of the latest US jobless claims data. If initial jobless claims continue to increase at an unprecedented level, it will dampen market sentiment.
Canadian Dollar (CAD) Slips as BoC Highlight ‘Uncertain’ Outlook
The Canadian Dollar (CAD) edged lower against a handful of currencies today after the Bank of Canada (BoC) left interest rates on hold and highlighted the economy was beginning to recover.
However, the bank’s statement highlighted that the ‘Canadian outlook is extremely uncertain’ and it would be a slow return to pre-Covid-19 growth.
Looking ahead, ‘Loonie’ traders will remain focused on the OPEC+ meeting which could offer CAD some support if oil prices rise.
New Zealand Dollar (NZD) Boosted by Upbeat Vaccine Reports
The New Zealand Dollar (NZD) rose against a handful of currencies as risk appetite increased after reports revealed Moderna Inc’s experimental vaccine for coronavirus triggered immune responses in all healthy volunteers.
Looking ahead, the ‘Kiwi’ could continue to make gains if risk appetite improves further.
Upcoming Data
16 July 11:30 AUD Unemployment Rate (June) 7.5%
16 July 16:00 GBP Claimant Count Change (June) 210K
16 July 16:00 GBP Unemployment Rate (May) 4.2%
16 July 21:45 EUR ECB Interest Rate Decision 0%
16 July 22:30 EUR ECB Press Conference
16 July 22:30 USD Retail Sales (June) 4.5%
16 July 22:30 USD Initial Jobless Claims (11/June) 1290K