Australian Dollar (AUD) Mixed despite an Upbeat RBA Governor
The Australian Dollar (AUD) was mixed at the end of the week after Reserve Bank of Australia (RBA) Governor Philip Lowe said the bank had no concerns about the stability of the bank’s system.
However, these comments followed dire unemployment data which saw the country’s jobless rate surge to a 22-year high. Added to this, the Commonwealth Bank of Australia reported that around 20,000 of its mortgages are held by people claiming unemployment benefits due to the coronavirus crisis.
Looking ahead, the ‘Aussie’ could benefit during today’s session if risk appetite improves following the weekend’s meeting between top US and Chinese officials over the Phase 1 trade deal.
Pound (GBP) Boosted as Government Orders Reopening of Economy
The Pound (GBP) made gains at the end of the week amid thin August trading as investors remained on the sidelines from making directional decisions on Sterling.
With coronavirus cases rising around the world, Britain’s government imposed further quarantine measures on tourists returning from holidays in France, the Netherlands and Malta due to high infection rates. However, Prime Minister Boris Johnson ordered the reopening of the UK economy to continue, after the jump in cases two weeks ago, which caused him to pause, had levelled off.
Looking ahead, traders will be focused on the next round of Brexit trade negotiations, where an upswing in Brexit optimism would boost Sterling this week.
Euro (EUR) Falls as Bloc Records Worst Fall in Employment on Record
The Euro (EUR) remained flat at the end of the week but suffered losses against a stronger Pound. The latest data from the bloc showed its trade surplus rose in June as the fall in imports outpaced the slump in exports due to the coronavirus crisis.
EUR struggled after the Eurozone recorded its worst fall in employment on record after data showed the number of people employed tumbled by -2.6% in the EU in the second quarter. Eurostat noted this was the ‘sharpest’ decline since the series began in 1995.
Today could see the currency continue to edge lower as traders await London and Brussels to continue their latest round of Brexit trade talks.
US Dollar (USD) Index Heads Towards Longest Weekly Losing Streak in a Decade
The US Dollar (USD) steadied on Friday as US bond yields jumped and disappointing Chinese data weighed on risk sentiment which slowed down the sell off in the ‘Greenback’. However, this failed to stop the Dollar index heading towards its longest weekly losing streak since 2010.
Meanwhile, the latest US retail sales data showed sales increased less than forecast as consumers cut back on purchases amid a rise in coronavirus cases and a reduction in unemployment benefits. However, the Commerce Department said this did not change expectations that consumer spending would rebound this quarter.
Looking ahead, the Dollar could struggle to claw back losses if the latest New York Empire State Manufacturing Index slumps further than expected in August.
Canadian Dollar (CAD) Slides as Oil Prices Fall Below $45 a Barrel
The Canadian Dollar (CAD) slumped on Friday after oil prices fell below $45 a barrel, surrendering most of the week’s gains.
Prices remained under pressure as doubts about oil demand recovering due to the coronavirus pandemic weighed on sentiment.
Looking ahead, weak oil prices and disappointing New Motor Vehicle Sales in June could send the ‘Loonie’ lower today.
New Zealand Dollar (NZD) Biggest Loser Last Week
The New Zealand Dollar (NZD) was the biggest loser last week as it remained under pressure due to a new coronavirus outbreak.
Added to this, the Reserve Bank of New Zealand (RBNZ) flagged increased bond buying and mentioned the possibility of taking interest rates into negative territory again.
The ‘Kiwi’ could make slight gains today following the release of the latest Services NZ PSI. If June’s PSI jumps higher than expected, NZD will edge higher.