Australian Dollar Steady as US Dollar Weakness Benefits ‘Aussie’

Australian Dollar (AUD) Steadily Rises as Upbeat Risk-Sentiment Returns

The Australian Dollar (AUD) saw itself heading higher during Tuesday’s session as a more upbeat market mood supported the risk-correlated ‘Aussie’.

Whilst Australia deals with an ongoing coronavirus outbreak, the states of Victoria and South Australia ended their lockdowns yesterday to the relief of many investors, however any major gains were capped for AUD as Sydney announced a further four week lockdown.

This morning’s consumer price index is expected to report a sharp uptick in domestic inflation in the second quarter, which could provide further support to AUD exchange rates today.

Pound (GBP) Muted as Worries over Coronavirus Grow

The Pound (GBP) struggled to find any strong directional bias yesterday as amidst concerns the decline seen in daily coronavirus cases over the past week could be short-lived.

Whilst the Confederation of British Industry’s (CBI) latest distributive trade figures from the UK softened less-than-expected, it was not enough to provide any meaningful support for the Pound.

Today’s Nationwide housing prices data could drive movement in the Pound, though many investors will remain focused on domestic coronavirus developments.

Euro (EUR) Benefits from Disappointing US Data

The Euro (EUR) capitalised on a pullback in the US Dollar (USD) to push higher on Tuesday, as the strong negative correlation between the pairing reflected well on the single currency.

This upside in EUR exchange rates was aided by the announcement that the EU’s vaccination drive has now seen 70% of adults in the EU receive at least one jab.

This afternoon’s German GfK consumer confidence index for August is expected to turn positive for the first time since the start of pandemic, potentially providing a boost to the Euro today.

US Dollar (USD) Weakens on Durable Goods Orders Data

The US Dollar (USD) was unable to shake off the underwhelming nature of June’s durable goods orders figure yesterday.

While forecasts had pointed towards goods orders losing some of their momentum to 2.1%, the data fell short of expectations. Growth of just 0.8% on the month suggests that orders came under significant pressure in June as global coronavirus cases began to surge.

The US Dollar will likely continue being driven by safe-haven demand through today, as markets prepare for the latest interest rate decision from the Federal Reserve.

Canadian Dollar (CAD) Pushes Higher Thanks to Oil Price Resurgence

The Canadian Dollar (CAD) trended higher in the wake of a resurgence in oil prices during Tuesday’s session. The uptick in oil provided fresh support for the commodity-correlated ‘Loonie’.
Overnight, Canadian CPI figures are expected to report a softening of inflation in June which could cause CAD exchange rates to stumble.

New Zealand Dollar (NZD) Gains Ground on Positive Market Mood

The New Zealand Dollar (NZD) was able to gain ground against some of its weaker rivals on Tuesday, in spite of a lack of domestic data. As the US Dollar weakened, the ‘Kiwi’ found headwind to trend higher.

Data Releases

Jul 28th 11:30 AUD Inflation Rate (Q2) 0.7%
Jul 28th 16:00 EUR GfK Consumer Confidence (Aug) 1
Jul 28th 16:00 GBP Nationwide Housing Prices (Jul) 0.6%
Jul 28th 22:30 CAD Inflation Rate (Jun) 0.4%
Jul 29th 04:00 USD Fed Interest Rate Decision 0.25%

Mathew Andrews