Australian Dollar (AUD) Strengthens amid Upbeat Market Mood
The Australian Dollar (AUD) rose yesterday as a risk-on mood and a pullback in the US Dollar helped to support the ‘Aussie’ at the start of the week.
However, ‘Aussie’ gains were limited as comments from China, Australia’s largest trading partner, caused a slip in commodity prices, including iron ore and copper.
In absence of any notable data, investors will be keeping an eye on the market mood in the coming days.
Pound (GBP) Weakens on Indian Variant Concerns
The Pound (GBP) was down throughout most of the day over concerns that the Indian variant of the coronavirus could cause the UK’s roadmap out of lockdown to be delayed.
Prime Minister Boris Johnson is coming under increasing pressure to push back the June 21st deadline for the UK to be free of lockdown restrictions despite the UK having administered 60 million vaccine doses.
A quieter economic calendar from the UK could leave Sterling open to further losses in the coming days.
Euro (EUR) Supported by US Dollar Weakness
The Euro (EUR) was supported during yesterday’s session as a weakening Pound and mixed US Dollar helped the Euro to head higher.
EUR received further support from the Eurozone’s recovery from coronavirus increasing at a fast pace, with a drop of 60% in cases across the bloc.
Today sees the release of the latest GDP growth rate data from Germany for Q1 which could cause EUR to weaken as forecasts are expected to confirm that the German economy contracted 1.7% during the first quarter.
US Dollar (USD) Weakens amid Risk-on Trade
The US Dollar (USD) weakened against many of its major rivals as risk-on trade and a pullback in US Treasury yields limited the appeal of the ‘Greenback.’
In addition, the latest Chicago Fed National Activity Index fell to 0.24 during April from an 8-month high of 1.71 in March, suggesting a slowdown in economic growth in the US.
Looking ahead, USD exchange rates will remain sensitive to market sentiment and speculation over the Federal Reserve tapering its monetary policy before high-impact data releases later in the week.
Canadian Dollar (CAD) Mixed on Rising Oil Prices
The Canadian Dollar was mixed for much of yesterday, as a rise in oil prices following a pause in US-Iran nuclear pact talks helped to underpin CAD exchange rates.
New Zealand Dollar (NZD) Strengthens on New Zealand Retail Sales
The New Zealand Dollar (NZD) spent much of yesterday’s session higher against many of its rivals as the latest retail sales from New Zealand expanded 2.5% in Q1 of 2021.
On Wednesday, the Reserve Bank of New Zealand (RBNZ) will announce its interest rate decision which could see the ‘Kiwi’ head higher.
Data Releases
May 25th 16:00 EUR DE GDP Growth Rate QoQ (Q1) -1.7%
May 25th 18:00 EUR DE Ifo Business Climate (May) 98.5
May 25th 20:00 GBP CBI Distributive Trades 30
May 25th 22:30 CAD Manufacturing Sales MoM Prel (Apr) 1.1%