Australian Dollar (AUD) Weakens amid Risk-Off Mood
The Australian Dollar (AUD) weakened for much of yesterday as a strengthening US Dollar and risk-averse mood weighed on the ‘Aussie.’
Although Australia has enjoyed a swift recovery from the coronavirus pandemic and a range of positive data limits AUD losses, investors headed to safe-haven currencies like USD yesterday.
Today will see the release of the latest employment figures from Australia, where the economy is thought to have created 20,000 jobs during April, pushing down the unemployment rate to 5.5% from 5.6%.
Pound (GBP) Mixed on UK Inflation Data
The Pound (GBP) was mixed throughout most of the day following on from the latest inflation rate data from the UK.
Annual inflation more than doubled during April to 1.5%, driven by a rise in household bills, and was the highest reading since March 2020.
However, concerns over the Indian variant of the virus have limited Sterling as investors remain cautious that the UK’s roadmap out of lockdown could be derailed, which will likely continue driving GBP exchange rates today.
Euro (EUR) Edges Higher as Rising Inflation Confirmed
The Euro (EUR) ticked higher during yesterday’s European session as the final Eurozone inflation reading for April confirmed a rise to 1.6%, up from 1.3%.
EUR exchange rate gains were capped by a modest recovery in the US Dollar, which was supported by rising US Treasury yields.
Looking ahead, the EU’s accelerating vaccine rollout could continue to underpin support for the single currency ahead of significant manufacturing and services PMIs on Friday.
US Dollar (USD) Strengthens on Rising Bond Yields
The US Dollar (USD) strengthened against many of its major rivals as risk-off trade and a rise in US Treasury yields supported the ‘Greenback.’
Investors were awaiting the latest FOMC minutes to find out whether there is any indication that the Federal Reserve (Fed) could hike interest rates sooner than expected.
Turning to today’s session, the latest initial US jobless claims could support USD if claims continue to fall at a sustained pace.
Canadian Dollar (CAD) Strengthens on Canadian Inflation
The Canadian Dollar (CAD) firmed yesterday as the currency found support from the latest Canadian inflation which rose more than expected to 3.4%. However, CAD exchange rates were down against the US Dollar and Euro amid a more cautious market mood.
New Zealand Dollar (NZD) Awaits Annual Budget
The New Zealand Dollar (NZD) spent much of yesterday’s session lower against many of its rivals as markets awaited the latest annual budget from New Zealand.
Data Releases
May 20th 11:30 AUD Unemployment Rate (Apr) 5.5%
May 20h 12:00 NZD Annual Budget Release
May 20th 22:30 USD Initial Jobless Claims 450K