Australian Dollar (AUD) Supported by Risk-On Trade
The Australian Dollar (AUD) found itself trending higher against many of the majors during yesterday’s session, in response to improving market risk appetite.
As much of Australia battled a coronavirus outbreak during July, the services sector fell foul to a slowdown in growth as many businesses had to close. The PMI fell to a 14-month low though the figure of 44.2 was not enough to scare investors away from the risk-correlated ‘Aussie’.
A lack of notable data from Australia will today see investors keep an eye on the global market mood, if the market mood deteriorates then AUD exchange rates could retreat.
Pound (GBP) Mixed as Anticipation for BoE Meeting Mounts
The Pound (GBP) remained mixed against its rivals during Wednesday’s session as anticipation for the Bank of England (BoE) policy meeting mounted.
A slowdown in growth in the Market services PMI from the UK left Sterling investors disappointed, though all attention soon turned toward the BoE interest rate decision.
Although no policy changes are expected, if the Bank of England proves less cautious that expected in its decision today, the Pound could rally and begin to trend higher.
Euro (EUR) Supported by Eurozone Services PMI
The Euro (EUR) held onto an uptrend during yesterday’s session as a broad weakness in the US Dollar (USD) paired with a positive Markit services PMI from the Eurozone bolstered the single currency.
The services sector continued to expand during July, albeit at a slower pace than forecast, as much of the Eurozone has now lifted from coronavirus restrictions.
Factory orders from the bloc’s largest economy, Germany, could be the main driver for movement in EUR exchange rates during today’s session.
US Dollar (USD) Unable to Regain Traction on Disappointing ADP Employment Change Data
The US Dollar (USD) was unable to make significant headwind against the majors today as softening in the US services sector and disappointing ADP employment change figures from the US undermined the appeal of the ‘Greenback’.
ADP employment change figures for July had shown the softest pace of job creation in 6 months, as the US labour recovery began to slowdown.
If initial US jobless claims rise overnight then the US Dollar could find itself struggling further against many of its major rivals.
Canadian Dollar (CAD) Softens on Souring Oil Prices
The Canadian Dollar (CAD) stumbled as souring oil prices and a lack of notable economic data from Canada did nothing to support the commodity-correlated ‘Loonie’.
New Zealand Dollar (NZD) Trends Higher on Upbeat Market Mood
The New Zealand Dollar (NZD) benefited from a strengthening market mood during Wednesday’s session which supported the appeal of the ‘Kiwi’ throughout the day.
Data Releases
Aug 5th 16:00 EUR DE Factory Orders (Jun) 1.9%
Aug 5th 21:00 GBP BoE Interest Rate Decision 0.1%
Aug 5th 22:30 USD Initial Jobless Claims (31/Jul) 384,000