Australian Dollar (AUD) Trends Up on Strong Risk Sentiment
The Australian Dollar (AUD) rose against its peers on Monday on an upbeat trading mood.
The ‘Aussie’ found support on risk-on tailwinds; also buoying AUD, manufacturing activity is expected to have increased in December.
Today, the Reserve bank of Australia (RBA)’s interest rate decision is in the spotlight. The RBA is expected to leave interest unchanged, but may announce an end to its bond-buying programme, supporting AUD.
Pound (GBP) Faces Headwinds amongst Lack of Data
The Pound (GBP) traded in a mixed range yesterday on a lack of UK data. With the publishing of the initial release of the Sue Gray report into the ‘partygate’ scandal infusing the currency with some modest volatility.
Overall, investors were wary of placing bullish bets ahead of the Bank of England (BoE)’s interest rate decision. The BoE is expected to raise rates to 0.5% on Thursday in an attempt to tackle inflationary pressures.
Into today, consumer credit may influence Sterling trading – borrowing is expected to have increased by £0.8bn, indicating increased consumer spending and potentially buoying GBP.
Euro (EUR) Climbs Overall on USD Weakness
The Euro (EUR) firmed against the majority of its peers on Monday as weakness in the US Dollar (USD) helped to lift the single currency.
Elsewhere, German inflation fell from 5.3% in December to 4.9% in January. While core inflation measures seem to have come down, though, energy prices still show almost unchanged inflation rates.
Employment data may influence Euro trading today – while Germany’s unemployment rate is expected to remain the same, unemployment in the Eurozone is expected to have eased slightly, potentially acting as a tailwind.
US Dollar (USD) Falls on Risk-On Mood
The US Dollar sank yesterday on a risk-on mood. The safe-haven currency was unable to attract support despite January’s Chicago PMI printing above expectations.
Relationships between Russia and Ukraine remain tense, with US senators close to finalising a deal to sanction Russia. Uncertainty over Russia’s intended actions had lent USD safe-haven tailwinds until recently.
Today, manufacturing and employment data may affect ‘Greenback’ exchange rates. Job openings are expected to have fallen and manufacturing activity to have decreased, exerting potential headwinds.
Canadian Dollar (CAD) Dips on Oil Dynamics
The Canadian Dollar (CAD) stumbled on Monday as WTI prices retreated to fresh session lows.
Today’s November GDP data is expected to reveal expansion, albeit narrow, potentially lending CAD support.
New Zealand Dollar (NZD) Firms on Market Mood
The New Zealand Dollar (NZD) ticked up yesterday as risk appetite grew; strength in the Australian Dollar supported the ‘Kiwi’.
Into tomorrow, the New Zealand Dollar may find tailwinds on upbeat jobs data. Employment in New Zealand looks to have increased by 0.3%, while the unemployment rate remains unchanged.
Data Releases
Feb 1st 08:00 AUD Markit Manufacturing PMI Final (Jan) 55.3
Feb 1st 10:30 AUD Retail Sales Prelim (Dec) 1.2%
Feb 1st 13:30 AUD RBA Interest Rate Decision 0.1%
Feb 1st 17:00 EUR German Retail Sales (Dec) -1.4%
Feb 1st 18:55 EUR German Unemployment Rate (Jan) 5.2%
Feb 1st 19:00 EUR Markit Manufacturing PMI Final (Jan) 59
Feb 1st 19:30 GBP BoE Consumer Credit (Dec) £0.8bn
Feb 1st 19:30 GBP Markit/CIPS Manufacturing PMI Final (Jan) 56.9
Feb 1st 20:00 EUR Unemployment Rate (Dec) 7.1%
Feb 1st 23:30 CAD GDP (Nov) 0.3%
Feb 2nd 00:30 CAD Markit Manufacturing PMI (Jan) 56
Feb 2nd 01:00 USD JOLTs Job Openings (Dec) 10.3m
Feb 2nd 01:00 USD ISM Manufacturing PMI (Jan) 57.5