Australian Dollar (AUD) Faces Mixed Trading Stimulus
Trade in the Australian Dollar (AUD) was mixed on Thursday as risk-off sentiment exerted downside while rising commodity prices limited losses.
Spot gold gained more than 3% to reach $1,969 an ounce, while aluminium hit a record high of $3,443 a tonne in London. Meanwhile, market analysts warned that risk appetite would likely diminish commodity-based upside.
Looking ahead, ‘Aussie’ exchange rates are likely to trade in accordance with current affairs today. The more the situation in Ukraine escalates, the more risk-averse trading could become and the further AUD may fall.
Pound (GBP) Tumbles as BoE Rate Hike Bets are Undermined
The Pound (GBP) fell through yesterday’s session as downbeat trading sentiment dampened Bank of England (BoE) rate hike expectations.
BoE policymakers betrayed a dovish tone in Wednesday’s interview with the Treasury select committee – Thursday’s events prompted further caution as the conflict in Ukraine caused volatility in the energy market.
A lack of significant data leaves Sterling to trade on external factors today. As Russia’s invasion of Ukraine takes centre stage, Brexit tensions have eased somewhat.
Euro (EUR) Wavers on Comparative Risk-Off Status
The Euro (EUR) fluctuated on Thursday despite a lack of significant data, as the currency represented a safer investment than its risk-on peers.
More hawkish signalling than is usual for the European Central Bank (ECB) has also buoyed the Euro in recent days – although yesterday’s meeting of policymakers was repurposed at the last minute to discuss current happenings in Ukraine.
Finalised German GDP data could affect EUR trading today, alongside economic sentiment in the Eurozone. If the US Dollar (USD) continues to accrue support, however, the single currency may trend lower on account of the pair’s strong negative correlation.
US Dollar (USD) Buoyed by Upbeat GDP, Jobs Data
The US Dollar (USD) skyrocketed, being underpinned by its safe-haven status amidst volatile trading conditions; also supporting the ‘Greenback’ was a clutch of positive domestic data.
America’s economy grew by 7% in the last quarter of 2021, according to the second GDP estimate. Meanwhile, initial jobless claims fell to 232K in the week ending 19 February – less than the 235K anticipated.
Into today, the PCE price index is expected to reveal that personal consumption expenditure went up to 5.9% in January 2022, from 5.8% the year previous. If inflation rises as expected, USD may enjoy tailwinds.
Canadian Dollar (CAD) Firms on Oil Price Jump
The Canadian Dollar (CAD) climbed on Thursday in spite of risk-off trading, as conflict in Ukraine dramatically pushed up oil prices. Supply concerns took hold, given that Russia is a major fuel exporter – pushing crude oil prices to above $97 per barrel.
New Zealand Dollar (NZD) Weakens on Market Mood
The New Zealand Dollar (NZD) slumped against several peers yesterday, as downbeat trading sentiment weighed upon the risk-on currency. An optimistic outlook for monetary policy tightening from the Reserve Bank of New Zealand (RBNZ) was unable to uplift ‘Kiwi’ sentiment.
Tomorrow’s trade balance could dent NZD further, as the country’s deficit is expected to expand to NZ$-1500.
Data Releases
Feb 25th 11:00 USD Fed Waller Speech N/A
Feb 25th 17:00 EUR German GDP Growth Rate Final (Q4) -0.7%
Feb 25th 20:00 EUR Economic Sentiment (Feb) 113.1
Feb 25th 21:15 EUR ECB President Lagarde Speech N/A
Feb 25th 23:30 USD Durable Goods Orders (Jan) 0.8%
Feb 25th 23:30 USD PCE Price Index (Jan) 5.9%
Feb 26th 01:00 USD Michigan Consumer Sentiment Final (Feb) 61.7
Feb 25th 07:45 NZD Balance of Trade (Jan) NZ$-1500