USD Recovers Some Ground, EUR Slips

Australian Dollar (AUD) Strengthens amid Upbeat Market Mood

The Australian Dollar (AUD) found modest support amid an upbeat market mood for much of yesterday.

However, ‘Aussie’ gains were limited as a lack of notable data failed to push the currency higher.

Australian Dollar investors will continue to focus on the global market mood in the second half of the week, and a resurgence in the US Dollar could see AUD weaken.

Pound (GBP) Struggles as UK Coronavirus Woes Continue

The Pound (GBP) weakened during yesterday’s session as the Indian variant of the coronavirus and the inquest into how the UK government handled the pandemic limited Sterling sentiment.

Former government aide Dominic Cummings has blasted the government’s response to the coronavirus pandemic and has alleged that Boris Johnson welcomed Covid-19 ‘chaos’ because it made him more popular.

Sterling could be open to losses in the second half of the week due to a lack of economic data from the UK and concerns persist over UK-EU relations, rising coronavirus cases, and potential delays to easing restrictions.

Euro (EUR) Dented by Dovish ECB Commentary

The Euro (EUR) weakened during yesterday’s European session as dovish commentary from the European Central Bank (ECB) over the economic recovery from coronavirus limited the appeal of the single currency.

Despite a rise in France’s business climate during May to a two-and-a-half-year high, EUR exchange rates ticked lower. The single currency’s negative correlation with the US Dollar also weighed on EUR as USD recovered some of it recent losses.

Today’s German GfK Consumer Confidence is expected to rise to -3 points. Although remaining in contraction, the reading would be the highest in 6 months which could see the Euro head higher.

US Dollar (USD) Makes Modest Gains despite Dovish Fed

The US Dollar (USD) weakened against many of its major rivals early in the European session as dovish commentary from the Federal Reserve and an upbeat market mood limited the appeal of the ‘Greenback.’

However, USD exchange rates made some modest gains as falling equity markets drove safe-haven demand for USD despite US Treasury yields remaining near weekly lows.

Looking ahead, USD investors will look toward the latest initial US jobless claims and durable goods orders data today, which if claims continued to fall at a sustained pace and goods orders data meets forecast could see a resurgence in USD.

Canadian Dollar (CAD) Slips on Retreating Oil Prices

The Canadian Dollar slipped slightly yesterday as oil prices retreated, although WTI crude continues to hold at $65 a barrel.

New Zealand Dollar (NZD) Bolstered by RBNZ Interest Rate Decision

The New Zealand Dollar (NZD) spent much of yesterday’s session bolstered as an upbeat market mood and the latest Reserve Bank of Australia’s (RBNZ) interest rate decision supported the ‘Kiwi’.
A more hawkish outlook from the bank could push the New Zealand Dollar higher heading into the weekend.

Data Releases

May 27th 16:00 EUR DE GfK Consumer Confidence (Jun) -3
May 27th 22.30 USD Durable Goods Orders (Apr) 0.7%
May 27th 22:30 USD US Initial Jobless Claims (22/May) 425k

Louisa Heath