Australian Dollar (AUD) Supported by Russian Comments
The Australian Dollar (AUD) enjoyed some upside on Friday as Russian press secretary Dmitry Peskov and foreign secretary Sergei Lavrov both indicated that President Vladimir Putin may be open to negotiation.
Peskov said that Putin was ready to talk with the Ukrainian President Volodymyr Zelenskyy if he agrees to compromise on Russia’s red line issues; subsequently, Lavrov said that Russia wants the Ukrainian people to be independent and define their own destiny.
Looking ahead, the outcome of a virtual NATO summit will likely be analysed for trading stimulus in the near term. Today, AU retail sales could buoy the ‘Aussie’, if they increase as expected.
Pound (GBP) Fluctuates as Conflict in Ukraine Continues
The Pound (GBP) traded in a mixed range at the end of last week, as a lack of significant UK data exposed the currency to external factors.
British and European powers came under criticism in the early European session, for not blocking Russia from the SWIFT international payment system: UK Defence Minister Robert Wallace said that the UK would like to cut Russia off, but added ‘it is difficult as not every country wants them out.’
GBP exchange rates will likely remain at the mercy of events in Ukraine today, given an ongoing lack of domestic economic releases.
Euro (EUR) Firms Overall, despite Weak German GDP
The Euro (EUR) attracted some safe-haven bets on Friday as Russian troops continued to target the city of Kyiv, against a backdrop of diplomatic statements.
The single currency was able to shrug off weak German data, given markets’ focus on geopolitical tensions – Germany’s finalised GDP release revealed that the country’s economy contracted in the last quarter of 2021.
A lack of significant economic data leaves EUR to trade on political events today. If the US Dollar (USD) strengthens, the Euro may come under pressure due to the currencies’ strong negative correlation.
US Dollar (USD) Trades Mixed on Wavering Risk Sentiment
US Dollar upside was limited at the end of last week, as risk sentiment recovered briefly. Market mood subsequently slumped, however, as Putin agreed to talks on the condition that Ukraine ‘put down their arms’.
Still, the ‘Greenback’ was unable to stage a solid rebound, in spite of better-than-expected durable goods orders and a 6.1% increase in January’s annualised PCE price index.
Today, USD trading could be affected by February’s Chicago PMI and the Dallas Federal Reserve manufacturing index. Both are expected to reveal slowing activity, potentially weighing on the currency.
Canadian Dollar (CAD) Losses Capped by Oil Price Dynamics
The Canadian Dollar (CAD) found some support on Friday as oil prices continued to benefit from tensions in Ukraine. The cost of WTI crude remained high as it was considered likely that OPEC+ would stick to its existing output policy.
Current account data may affect ‘Loonie’ trading today – Canada’s surplus is expected to fall, applying possible downside.
New Zealand Dollar (NZD) Climbs on Better-Than-Expected Trade Balance
The New Zealand Dollar (NZD) rose at the end of the week as the country’s trade deficit increased by less than expected.
Business confidence data may dent ‘Kiwi’ sentiment today, if the finalised ANZ release reports a decrease in February, as expected.
Data Releases
Feb 28th 10:00 NZD ANZ Business Confidence Final (Feb) -26.5
Feb 28th 10:30 AUD Retail Sales Prelim (Jan) 0.2%
Feb 28th 23:30 CAD Current Account (Q4) C$0.9B
Mar 1st 00:45 USD Chicago PMI (Feb) 63.9
Mar 1st 01:30 USD Dallas Fed Manufacturing Index (Feb) 1
Mar 1st 07:30 AUD Ai Group Manufacturing Index (Feb) 51.9