Australian Dollar Heads Higher as Global Market Mood Improves

Australian Dollar (AUD) Benefits from Increased Global Confidence

The Australian Dollar (AUD) was able to rally at the start of the week thanks to a more upbeat market mood, despite an ongoing coronavirus outbreak across Australia.

This upside in AUD exchange rates was reinforced by a pullback in the US Dollar (USD) which further bolstered market risk appetite.

This evening, a speech from Reserve Bank of Australia (RBA) deputy governor Guy Debelle, could cause the ‘Aussie’ to stumble if he strikes a dovish tone in light of Australia’s current coronavirus lockdowns.

Pound (GBP) Supported by Fall in Daily Coronavirus Cases

The Pound (GBP) found itself supported against the majority of its peers during Monday’s European session, following some upbeat domestic coronavirus statistics.

Across the UK coronavirus cases have fallen for a fifth day in a row, bolstering the appeal of Sterling as much of the country gets back to ‘normality’. However, Sterling’s gains were capped following some dovish remarks from Bank of England (BoE) policymaker Gertjan Vlieghe.

If the Confederation of British Industry’s (CBI) distributive trades index softens during July then the Pound could relinquish some of these gains later this evening.

Euro (EUR) Stumbles as German Business Expectations Falls

The Euro (EUR) faltered yesterday thanks to a worse-than-expected decline in German business confidence this month.

Investors had expected to see a modest uptick in the index on the month, leaving the single currency on the back foot when it instead dipped from 101.7 to 100.8 points.

Today, an absence of economic data will see investors keeping an eye on any coronavirus developments across the Eurozone to drive movement in EUR exchange rates.

US Dollar (USD) Stumbles as Treasury Yields Fall

The US Dollar (USD) lost support during the start of the week as a drop in US Treasury yields damped the appeal of the ‘Greenback’.

More so, a more upbeat market mood caused USD exchange rates to be open to further losses against many of the majors.

Overnight the release of the latest durable goods orders from the US could provide some support for the US Dollar as economists forecast another robust expansion of order growth in June.

Canadian Dollar (CAD) Weakens as Oil Prices Slide

The Canadian Dollar (CAD) weakened throughout yesterday’s session as oil prices slid on the back of fresh coronavirus concerns, limiting the appeal of the commodity-correlated ‘Loonie’.

New Zealand Dollar (NZD) Supported by Risk Appetite

The New Zealand Dollar (NZD) saw some support yesterday as the mood of the global market began to improve slightly.
With no New Zealand data set for release today, NZD exchange rates are expected to remain at risk of weakening if the global market mood sours.

Data Releases

Jul 27th 20:00 GBP CBI Distributive Trades (Jul) 21
Jul 27th 22:30 USD Durable Goods Orders (Jun) 2.1%
Jul 27th 22:35 AUD RBA Debelle Speech

Mathew Andrews