Australian Dollar (AUD) Weakens in Risk-Off Trade
The Australian Dollar (AUD) struggled to attract support yesterday, with demand for the risk-sensitive currency being undermined amidst worries about a slowdown in China’s economic recovery and a rebound in the US Dollar.
This overshadowed the release of Australia’s latest jobs figures, which may have otherwise bolstered the ‘Aussie’ after reporting the domestic unemployment rate dropped to a decade low in June.
Looking ahead, any upside in the ‘Aussie’ may prove limited through the end of this week, as a lull in data leaves AUD exchange rates at the mercy of market sentiment.
Pound (GBP) Rallies on Hawkish BoE Comments
The Pound (GBP) initially trended lower on Thursday, with Sterling sentiment weakening after the UK’s own jobs report showed a shock rise in unemployment in May.
However, GBP exchange rates raced higher in the second half of the European session, after Bank of England (BoE) policymaker Michael Saunders hinted at the possibility of early rate hikes.
In the absence of any notable GBP data today, the direction of Sterling is likely to be determined by domestic coronavirus developments, amidst ongoing concerns that surging cases could undermine the sustainability of the government’s reopening plans.
Euro (EUR) Undermined by USD Strength
The Euro (EUR) traded with modest losses yesterday as the single currency’s strong negative correlation with the US Dollar saw it stumble as the latter rallied.
Further limiting the appeal were ongoing concerns over the current coronavirus situation in Europe, which poses a potential threat to the Eurozone’s economic recovery.
Coming up, the Eurozone’s latest consumer price index looks set to confirm than inflation in the bloc slowed to 1.9% last month, which could also cap the upside potential of the Euro today.
US Dollar (USD) Buoyed by Bearish Trade
The US Dollar (USD) rebounded on Thursday, bolstered by a souring of market sentiment, amidst ongoing concerns over the resurgence in global coronavirus cases.
This upside in the ‘Greenback’ was reinforced by the publication of the latest US unemployment release after it reported jobless claims fell to a new post-pandemic low in the first week of July.
Looking ahead, the US Dollar could face some headwinds later this evening as the latest US retail sales figures are expected to report sales growth contracted for the second consecutive month in June.
Canadian Dollar (CAD) Dented by Weakening Oil Prices
The Canadian Dollar (CAD) was placed on the defensive through yesterday’s trading session, as another drop in oil prices sapped the appeal of the commodity-linked ‘Loonie’.
New Zealand Dollar (NZD) Retreats in Risk-Off Mood
The New Zealand Dollar (NZD) retreated on Thursday, with the currency being undermined by a bout of profit taking, as the post-Reserve Bank of New Zealand (RBNZ) optimism gave way to a risk-off mood.
Data Releases
Jul 16th 19:00 EUR Inflation Rate (Jun) 1.9%
Jul 16th 19:00 EUR Trade Balance (May) €16.4bn
Jun 10th 20:30 USD Retail Sales (Jun) -0.4%
Jun 10th 22:00 USD Consumer Sentiment (Jul) 86.5