Australian Dollar (AUD) Firms on Upbeat Business Confidence
The Australian Dollar (AUD) ticked higher on Monday, with the ‘Aussie’ attracting bids after the latest NAB business confidence index printed at a 10-year high in February. The ‘Aussie’ was able to build on these gains through the European trading session as the appeal of the risk-sensitive currency was further bolstered by broad-based weakness in the US Dollar.
Looking ahead, the Australian Dollar could extend its rally today if we see a similar improvement in the latest Westpac consumer confidence index.
Pound (GBP) Buoyed by Vaccine Hopes
The Pound (GBP) trended higher through yesterday’s trading session, with the UK’s vaccine success allowing the currency to take advantage of the upbeat market mood. However, these gains were kept in check by concerns that Boris Johnson’s roadmap for easing lockdown could be subject to change after the PM warned at the start of the week that the reopening of schools is a clear risk.
In the continued absence of any notable GBP economic releases, the focus for GBP investors today will remain on UK coronavirus statistics. Will the continued success of the vaccination programme be able to offset any concerns that the fall in new cases may be slowing?
Euro (EUR) Muted on Disappointing GDP Release
The Euro (EUR) was subdued on Tuesday, with the appeal of the currency being undermined after the Eurozone’s latest GDP estimate reported growth in the last quarter of 2020 was revised down from –0.6% to –0.7%. However, the single currency’s negative correlation with the US Dollar (USD) helped to cap the Euro’s losses following a broad pullback in the US currency.
Meanwhile, any further upside in the Euro may be limited today as EUR investors brace ahead of the conclusion of the European Central Bank’s (ECB) latest policy meeting on Thursday.
US Dollar (USD) Retreats as US Treasury Yields Slump
The US Dollar (USD) was placed on the defensive yesterday, stumbling in response to a sharp pullback in US Treasury yields, which fell from a one-year high. Further limiting the appeal of the safe-haven ‘Greenback’ was a prevailing risk-on mood, driven by US stimulus hopes and China’s stock intervention.
In the spotlight today will be the publication of the latest US consumer price index. Economists are forecasting February’s CPI figures will report a sharp acceleration of inflation, which if correct, could trigger a rebound in US yields and propel the US Dollar higher.
Canadian Dollar (CAD) Dented by Stalling Oil Prices
The Canadian Dollar (CAD) struggled to find support on Tuesday, with the commodity-linked ‘Loonie’ being undermined as oil prices stalled well below their recent highs.
Coming up the Bank of Canada (BoC) will hold its latest policy meeting later tonight. Will a positive outlook from the bank help to boost CAD exchange rates?
New Zealand Dollar (NZD) Dips on Disappointing Data
The New Zealand Dollar (NZD) was left on the defensive on Monday, with investors shunning the ‘Kiwi’ after data showed weaker-than-expected growth in domestic manufacturing sales in the last quarter of 2020.
Data Releases
Mar 10th 08:00 AUD RBA Lowe Speech
Mar 10th 09:30 AUD Westpac Consumer Confidence (Mar) 110
Mar 10th 23:30 USD Inflation Rate (Feb) 1.7%
Mar 11th 01:00 CAD BoC Rate Decision 0.25%