Australian Dollar Rallies as Risk-On Mood Prevails

Australian Dollar (AUD) Rallies in Upbeat Trade

The Australian Dollar (AUD) opened this week’s session on the back foot, with the China-proxy ‘Aussie’ falling afoul of some downbeat trade figures from China.

However, AUD exchange rates subsequently rallied overnight during the European session as a pullback in the US Dollar (USD) and improving market sentiment bolstered the appeal of the Australian Dollar.

Looking ahead, could a weakening of business morale in National Australia Bank’s (NAB) latest business confidence index push the ‘Aussie’ lower later this morning?

Pound (GBP) Firms despite Brexit Concerns

The Pound (GBP) initially stumbled on Monday, falling in response to comments from Health Secretary Matt Hancock, in which he suggested the government is ‘open’ to delaying the next stage of lockdown easing.

Sterling was then able to rebound in the second half of the session, although there didn’t appear to be any clear catalyst for this recovery, and it came in spite of souring relations between the UK and EU, ahead of talks regarding the Northern Ireland protocol later this week.

In the absence of any notable data releases, movement in the Pound today is likely to remain dominated by domestic coronavirus developments.

Euro (EUR) Weakens on Disappointing German Data

The Euro (EUR) edged lower during yesterday’s session, after German factory orders printed below expectations in April.

German statistics agency, Destatis, reported factory orders unexpectedly contracted by 0.2% in April, having previously risen by 3.9%, missing forecasts for a 1% expansion.

In the spotlight today will be the publication of Germany’s latest ZEW economic sentiment index, in which another improvement in morale could help the Euro to recoup some of its losses later this evening

US Dollar (USD) Buoyed by Yellen Comments

The US Dollar (USD) ticked higher at the start of this week’s session, after USD investors seized on comments made by Treasury Secretary Janet Yellen over the weekend, in which she expressed support for higher interest rates.

However, these gains faded by the start of the US trading session as a bullish market mood prompted investors to shy away from the safe-haven currency.

Coming up, analysts are forecasting that April’s JOLTs job openings figures will beat March’s record high later this afternoon, but will this be enough to revive demand for the US Dollar?

Canadian Dollar (CAD) Muted as WTI Crude Unable to Break $70 Barrier

The Canadian Dollar (CAD) traded in a narrow range on Monday, with the oil-sensitive currency struggling to attract support after WTI crude prices began to dip, after falling just short of $70 a barrel at $69.97.

New Zealand Dollar (NZD) Appreciates in Risk-On Trade

The New Zealand Dollar (NZD) found some modest gains on Monday, with the ‘Kiwi’ shaking off its initial losses as market sentiment gradually improved through the European trading session.

Data Releases

Jun 8th 11:30 AUD NAB Business Confidence (May) 24
Jun 8th 16:00 EUR German Industrial Production (Apr) 0.5%
Jun 8th 19:00 EUR GDP (Q1) -0.6%
Jun 8th 19:00 EUR German ZEW Economic Sentiment Index (Jun) 86
Jun 8th 22:30 CAD Trade Balance (Apr) CA$-0.7bn
Jun 8th 22:30 USD Trade Balance (Apr) $-69bn
Jun 9th 00:00 USD JOLTs Job Openings (Apr) 8.3m

Mathew Andrews