Australian Dollar Weakens as USD Strengthens

Australian Dollar (AUD) Struggles amid Risk-Off Mood

The Australian Dollar weakened throughout yesterday’s session as a risk-off mood and stronger US Dollar weighed on the ‘Aussie.’

Disappointing Australian economic data also caused AUD losses, with May’s finalised services PMI missing forecast and retail sales data showing growth slowed in April.

Investors will be keeping an eye on the global market mood heading into the weekend, with a deteriorating mood seeing AUD suffer further.

Pound (GBP) Supported by UK Services PMI

The Pound found itself heading higher yesterday following the release of the latest PMI’s from the UK for May.

The services sector enjoyed its fastest rate of output growth in almost a quarter of a decade as the UK economy continues to recover from the coronavirus pandemic.

Pound investors will be keeping an eye on any further coronavirus developments today, any indication that the Delta variant of the virus could dampen the UK’s lockdown easing plans and would cause GBP to slip.

Euro (EUR) Weakens on US Dollar Strength

The Euro (EUR) weakened during yesterday’s European session due to a resurgence in the US Dollar and the negative correlation in the pairing.

However, the Eurozone’s finalised May services PMI helped to limit any major losses for the single currency as growth hit its strongest pace of expansion since 2018.

Today’s Eurozone retail sales could continue limiting the Euro, with sales growth forecast to have contracted -1.2% in April.

US Dollar (USD) Supported by ISM Non-Manufacturing PMI

The US Dollar (USD) was supported yesterday as the latest ISM non-manufacturing PMI hit a fresh record high, and Initial US jobless claims fell to a new pandemic low of 385,000 beating market expectations of 400,000.

Combined with unexpectedly strong job creation in the ADP employment change figures, some USD investors saw the positive data as increasing the possibility of the Federal Reserve tapering its support earlier than previously outlined.

Looking ahead, USD investors will look toward today’s US non-farm payrolls which could see the currency heading higher into the weekend if the reading indicates a solid improvement on last month’s dire figures.

Canadian Dollar (CAD) Supported by Rising Oil Prices

The Canadian Dollar was steady yesterday as oil prices hit a new two-year high, however today’s Canadian employment figures could see the ‘Loonie’ suffer, with unemployment forecast to rise.

New Zealand Dollar (NZD) Weakens amid Souring Market Mood

The New Zealand Dollar (NZD) spent much of yesterday’s session on the back foot as a souring market mood limited the appeal of the ‘Kiwi.’

Data Releases

June 4th 19:00 EUR Retail Sales YoY (Apr) 21%
June 4th 22:30 CAD Employment Change (May) -10k
June 4th 22:30 USD Non-Farm Payrolls (May) 610k

Mathew Andrews