Australian Dollar (AUD) Strengthens on Domestic Tourism Package
The Australian Dollar (AUD) enjoyed strong support during yesterday’s session, as news that the US stimulus package had finally been passed drove investors towards higher-risk assets like the ‘Aussie’. Further boosting AUD exchange rates on Thursday was the Australian government outlining a AU$1.2bn package aimed at supporting the domestic tourism industry.
Looking ahead, barring any upsets, the broadly upbeat mood should allow the Australian Dollar to close this week’s session higher.
Pound (GBP) Steady ahead of GDP Release
The Pound (GBP) lacked any strong directional bias on Thursday, with movement in the UK currency mostly being influenced by its peers amidst the absence of any fresh impetus. While Sterling sentiment continues to be underpinned by the UK’s success in its vaccination programme, doubts over whether the UK’s reopening will be able to adhere to the government’s roadmap appears to have capped the upside in recent days.
Meanwhile, the publication of the UK’s latest GDP figures could put some pressure on the Pound later this evening as January’s monthly figures are expected to report a sharp slump in growth at the start of the year as the latest coronavirus lockdown was introduced.
Euro (EUR) Dips as ECB to Accelerate Bond Purchases
The Euro (EUR) was on the defensive yesterday as the European Central Bank (ECB) concluded its latest policy meeting by announcing it is ready to buy bonds at a ‘significantly’ higher pace. Speaking after the meeting, ECB President Christine Lagarde warned that high coronavirus infection rates and lockdowns are hurting growth, but that the bank has revised its Eurozone GDP forecasts for 2021 slightly higher.
Turning to today’s session, the publication of the Eurozone’s latest industrial production figures could provide some support to Euro, on the assumption that factory output in the bloc will have rebounded in line with expectations in January.
US Dollar (USD) Slumps as Yields Retreat
The US Dollar (USD) maintained its downward trajectory through yesterday’s trading session, as another slump in US Treasury yields and optimism over the passing of Biden’s stimulus package dented USD demand. However, helping to temper the ‘Greenback’s losses were the latest US initial jobless claims, where a larger-than-expected drop in new claims helped to boost US economic optimism.
Coming up, we could see the US Dollar attempt to mount a recovery later tonight if the University of Michigan’s consumer sentiment index indicates US household confidence continued to improve this month.
Canadian Dollar (CAD) Bolstered by Robust Oil Prices
The Canadian Dollar (CAD) trended higher on Thursday, as the appeal of the commodity-linked ‘Loonie’ was bolstered by an acceleration in oil prices, which saw WTI crude climb over 1% back above $65 a barrel.
Looking ahead, the Canadian Dollar may build on these gains later tonight if data shows that Canadian unemployment fell as expected last month.
New Zealand Dollar (NZD) Rallies in Risk-On Trade
The New Zealand Dollar (NZD) also firmed in overnight trade, with the drop in the US Dollar helping to boost market risk-appetite, which reflected well on the ‘Kiwi’.
Data Releases
Mar 12th 17:00 GBP GDP (Jan) -4.9%
Mar 12th 17:00 GBP Industrial Production (Jan) -0.6%
Mar 12th 20:00 EUR Industrial Production (Jan) 0.2%
Mar 12th 23:30 CAD Unemployment Rate (Feb) 9.2%
Mar 13th 01:00 USD Consumer Sentiment (Mar) 78.5