Australian Dollar (AUD) Strengthens amid Risk-On Mood
The Australian Dollar (AUD) rose yesterday as a risk-on mood and an unexpected fall in unemployment in Australia during April pointed towards a sustained recovery for the country.
The Australian unemployment rate dropped to 5.5% last month from 5.6% March, and is only 0.2% above the level at the start of the pandemic.
Today will see the release of the latest flash Markit PMIs for May which should give a clear indication into how the Australian economy is performing as much of the country leaves lockdown restrictions.
Pound (GBP) Mixed on UK Coronavirus Concerns
The Pound (GBP) was mixed throughout most of the day over concerns that the Indian variant of the coronavirus could derail the UK’s roadmap out of lockdown.
Despite those aged 34-35 now being invited for their coronavirus vaccine, almost 3,000 cases of the Indian variant of the virus have now been recorded in the UK.
UK services and manufacturing PMIs could boost the Pound later today as business activity is expected to have grown again in May as more the economy reopened. In addition, retail sales are also forecast to show another month of growth.
Euro (EUR) Edges Higher on German PPI
The Euro (EUR) ticked higher during yesterday’s European session as the latest German producer price index (PPI) figure for April revealed that the figure beat forecasts rising to 5.2%.
EUR traders have become increasingly optimistic surrounding the Eurozone’s recovery from the double-dip recession in Q1.
The latest flash services and manufacturing PMI data from the Eurozone could push the Euro even higher if they continue to show a steady growth.
US Dollar (USD) Weakens amid Risk-On Trade
The US Dollar (USD) weakened against many of its major rivals as risk-on trade limited the appeal of the ‘Greenback.’
However, limiting the US Dollar’s losses yesterday were the Federal Open Market Committee’s (FOMC) latest meeting minutes, with the bank taking a more hawkish outlook.
USD also received some support from the latest initial US jobless claims falling to a new pandemic low as there were 444,000 new claims for the week ending May 15th.
In the absence of notable USD data today, market sentiment will likely drive US Dollar movement.
Canadian Dollar (CAD) Supported by Canadian Employment Change
The Canadian Dollar (CAD) strengthened yesterday as the currency found support from the latest Canadian employment change for April which saw employment in Canada increase by 351,300 jobs.
CAD exchange rates also received a boost from the more upbeat market mood and were up against the US Dollar and Euro.
New Zealand Dollar (NZD) Strengthens on New Zealand Annual Budget
The New Zealand Dollar (NZD) spent much of yesterday’s session higher against many of its rivals as the latest annual budget release from New Zealand promised billions of dollars more towards rising inequality, and noted a faster economic recovery from the coronavirus pandemic.
Data Releases
May 21st 09:00 AUD Services PMI Flash (May) 59
May 21st 09:00 AUD Manufacturing PMI Flash (May) 59
May 21st 11:30 AUD Retail Sales MoM (Apr) 0.5%
May 21st 16:00 GBP Retail Sales MoM (Apr) 4.5%
May 21st 18:00 EUR Manufacturing PMI (May) 62.5
May 21st 18:00 EUR Services PMI (May) 52.3
May 21st 18:30 GBP Manufacturing PMI (May) 60.5
May 21st 18:30 GBP Services PMI (May) 62
May 21st 22:30 CAD Retail Sales MoM (Mar) 2.3%