Australian Dollar Benefits from Rivals’ Weakness
The Australian Dollar (AUD) found itself steadily rising for much of Thursday’s session as a strengthening market mood alongside a modest pullback in the US Dollar pushed the risk-correlated ‘Aussie’ higher.
A lack of economic data from Australia paired with the ongoing coronavirus situation in the country has capped any major gains as half of the country remains under lockdown restrictions. More so towards the end of the session the ‘Aussie’ weakened as the US Dollar began to resurge.
Ahead of the weekend the latest flash PMI figures from Australia could dent AUD exchange rates, amidst forecasts that private sector activity will have slowed in response to the coronavirus outbreak.
Pound Steady Despite UK ‘Pingdemic’ Worries
The Pound (GBP) trended higher through of yesterday’s trading session as GBP bulls appeared to shrug off concerns over the UK’s currently coronavirus situation.
This uptick in Sterling comes in spite of over 600,000 people receiving a ping from the NHS track and trace app, forcing them to self-isolate and placing strains on UK supply chains.
Whilst domestic coronavirus developments will remain in focus during today’s session, Pound investors will also look towards retail sales figures along with the latest flash PMI figures from the UK.
Euro Buoyed Following ECB Rate Decision
The European Central Bank (ECB) latest interest decision caused the Euro (EUR) to head higher during Thursday’s session, following a brief sell-off of the single currency.
The ECB kept interest rates at 0% whilst updating its forward guidance, a statement from the bank read: ‘In support of its symmetric 2% inflation target and in line with its monetary policy strategy, the governing council expects the key ECB interest rates to remain at their present or lower levels until it sees inflation reaching two per cent.’
Today’s Eurozone flash PMIs are expected to drive movement in Euro exchange rates, and could provide an additional boost to the Euro if they print positively.
US Dollar Softens on Jobless Claims Disappointment
US initial and continuing jobless claims disappointed yesterday, highlighting the challenges still facing the US labour market and weighing on the US Dollar (USD).
US jobless claims rose to 416,000 in the week ending 17th July. Robert Frick, corporate economist at Navy Federal Credit Union commented on the reading, saying: ‘We should keep a close watch on COVID-19 related layoffs in this ‘fourth wave’.
Overnight, flash PMI figures from the US are expected to give a better look into how the US economy is performing in the midst of a rise in delta variant cases of coronavirus.
Canadian Dollar Remains Under Pressure
The Canadian Dollar (CAD) came under pressure against many of its peers on Thursday despite a rise in oil prices, as the commodity-correlated currency can’t shake off investor concerns surrounding the global surge in coronavirus cases.
Tonight’s retail sale figures from Canada could cause the Canadian Dollar to slump further as another downturn in consumer spending is forecast in May
New Zealand Dollar Mixed on US Dollar Resurgence
The New Zealand Dollar (NZD) had been steadily trading for much on Thursday though a resurgence in the US Dollar caused the risk-sensitive ‘Kiwi’ to weaken.
Data Releases
23rd Jul 09:00 AUD Markit Composite PMI Flash (Jul) 55.6
23rd Jul 16:00 GBP Retail Sales (Jun) 0.4%
23rd Jul 18:00 EUR Markit Composite PMI Flash (Jul) 60
23rd Jul 18:00 GBP Markit/CIPS Composite PMI Flash (Jul) 61.7
23rd Jul 22:30 CAD Retail Sales (May) -3%
23rd Jul 23:45 USD Markit Services PMI Flash (Jul) 64.8