Australian Dollar (AUD) Under Pressure as Coronavirus Cases Rise
The Australian Dollar (AUD) slid lower across the board on Tuesday as coronavirus cases continue to surge across Australia, with concerns over the outbreak being reflected in the drop in Australian business confidence last month.
The mood towards the ‘Aussie’ then soured further overnight, in response to a better-than-expected US inflation reading.
Meanwhile, a disappointing consumer confidence index from Australia could leave AUD exchange rates open to further losses today.
Pound (GBP) Firms on Lockdown Easing Decision
The Pound (GBP) firmed against many of its major rivals yesterday, following the announcement from UK Prime Minister Boris Johnson than lockdown restrictions, along with social distancing measures would be scrapped on the 19 July in England.
However, with experts warning of the implications and coronavirus cases continuing to rise across the UK, many investors remain wary of how the UK’s economic recovery may fare in the coming months.
Looking ahead, the appeal of the Pound could strengthen today if the latest UK inflation figures show that consumer prices rose as expected last month.
Euro (EUR) Stumbles on Slowdown in German Inflation
The Euro (EUR) stumbled on Tuesday as June’s Germany’s consumer price index confirmed inflation slowed to 2.3% last month.
Reinforcing this downside in EUR exchange rates was the strong negative correlation between the Euro and US Dollar, which saw the single currency weaken as the ‘Greenback’ rallied.
The release of the latest industrial production figures from the Eurozone today could cause further trouble for the single currency if the figures meet forecasts and contract -0.2%.
US Dollar (USD) Strengthens Following US Inflation Data
The US Dollar (USD) pushed higher across the board last night as the latest US CPI figures came in much higher than expected.
Headline inflation rate jumped from 4.9% to 5.4% in June, propelling US Treasury yields higher and lifting USD exchange rates. This sharp increase in inflation could be enough to give the Federal Reserve incentive to tighten monetary policy sooner than first expected.
If tonight’s producer price index also impresses then the US Dollar could find fresh impetus to head higher throughout the rest of the week.
Canadian Dollar (CAD) Weakens as Oil Prices Remain Low
The Canadian Dollar (CAD) lacked direction yesterday as oil markets remain on the back foot following the collapse of the Organization of the Petroleum Exporting Countries (OPEC+) latest meeting last week.
Tonight, the Bank of Canada (BoC) will deliver their latest interest rate decision. Whilst rates are expected to remain at 0.25%, a hawkish tone from the bank could see the ‘Loonie’ find some much needed support.
New Zealand Dollar (NZD) Slides Ahead of New Zealand Interest Rate Decision
The New Zealand Dollar (NZD) found itself lacking in support in the continued absence of any fresh economic data releases.
Today’s Reserve Bank of New Zealand (RBNZ) interest rate decision could provide support to the ‘Kiwi’ if the bank choose to take a more hawkish stance.
Data Releases
Jul 14th 10:30 AUD Westpac Consumer Confidence Index (Jul) 105
Jul 14th 12:00 NZD Interest Rate Decision 0.25%
Jul 14th 16:00 GBP Inflation Rate (Jun) 2.2%
Jul 14th 19:00 EUR Industrial Production (May) -0.2%
Jul 14th 22:30 USD PPI MoM (Jun) 0.6%
Jul 15th 00:00 CAD Interest Rate Decision 0.25%