Australian Dollar (AUD) Stumbles as Risk Sentiment Wavers
The Australian Dollar (AUD) climbed against several peers in Tuesday’s early European session as an apparent de-escalation of tensions on the Ukrainian border bolstered risk sensitive currencies.
Though maintaining a portion of these gains, the ‘Aussie’ subsequently sank as it became clear the situation remained fraught.
Into today, speeches from the Reserve Bank of Australia’s Guy Debelle and Michele Bullock may influence AUD trading, alongside ongoing risk dynamics.
Pound (GBP) Subdued as Wage Growth is Overshadowed by Living Cost Crisis
The Pound (GBP) struggled to gain ground against its peers yesterday as UK real wages fell on account of high inflation.
Average earnings increased by 4.3% year-on-year as opposed to the 3.8% anticipated, but UK households remain worse off due to rising consumer prices.
If UK inflation remains unchanged today as expected, Sterling sentiment may weaken as bets for aggressive policy tightening from the Bank of England (BoE) diminish.
Euro (EUR) Strengthens Easing Ukraine Tensions
The Euro (EUR) was supported through Tuesday’s session by hopes a war in Europe might be avoided.
This upside in the single currency was reinforced by Germany’s latest ZEW economic sentiment index, which climbed to a seven-month high in February.
Euro sentiment may be affected today by a non-monetary policy meeting of the European Central Bank (ECB) – if an optimistic tone is struck, investors may anticipate hawkish signalling ahead.
US Dollar (USD) Wavers as Manufacturing Data Disappoints
The US Dollar fell against several peers yesterday as the NY Empire State manufacturing index printed at 3.1 as opposed to the 12.15 expected.
Unfilled orders increased and delivery times continued to lengthen as optimism dipped to its lowest level since mid-2020. Also weighing upon the currency was a recovery in risk appetite.
Retail sales and industrial production could influence ‘Greenback’ trading today and into tomorrow: meanwhile, if the FOMC minutes are hawkish, traders may increase bullish bets for Federal Reserve policy action.
Canadian Dollar (CAD) Trends Down on Oil Price Headwinds
The Canadian Dollar (CAD) inched lower on Tuesday as oil prices fell on easing geopolitical tensions. Worries over supply limitations reduced but didn’t disappear completely, as WTI traders remain on the defensive.
Canadian inflation could affect CAD rates today: if it remains unchanged, CAD may tumble as pressure reduces on the Bank of Canada (BoC) to hike interest rates.
New Zealand Dollar (NZD) Trades in a Narrow Range on Risk Dynamics
The New Zealand dollar (NZD) found some support yesterday as the threat of a war between Ukraine and Russia appeared to diminish, increasing risk appetite.
Tensions between the two countries remained high, however, capping any meaningful gains.
Data Releases
Feb 16th 17:00 GBP Inflation Rate (Jan) 5.4%
Feb 16th 18:00 EUR ECB Non-Monetary Policy Meeting N/A
Feb 16th 18:45 AUD RBA Debelle Speech N/A
Feb 16th 18:45 AUD RBA Bullock Speech N/A
Feb 16th 20:00 EUR Industrial Production (Dec) 0.3%
Feb 16th 23:30 CAD Inflation Rate (Jan) 4.8%
Feb 16th 23:30 USD Retail Sales (Jan) 2%
Feb 17th 00:15 USD Industrial Production (Jan) 0.4%
Feb 17th 04:30 CAD BoC Gov Lane Speech N/A
Feb 17th 05:00 USD FOMC Minutes N/A