Australian Dollar (AUD) Firms on Improving Risk Sentiment
The Australian Dollar (AUD) climbed on Monday following an initial downturn, as risk appetite recovered.
The start of talks between Russia and Ukraine inspired hope that the two countries may reach a peaceful agreement; recent rocket strikes on the Ukrainian city of Kharkiv killed dozens and wounded hundreds.
Into today, the Reserve Bank of Australia (RBA) will announce its interest rate decision: Australia’s interest rate is expected to remain at 0.1%, but if policymakers maintain a dovish outlook the ‘Aussie’ is likely to weaken.
Pound (GBP) Trades Mixed on Lack of Significant Data
The Pound (GBP) traded in a narrow range at the beginning of the week, on a lack of UK data.
GBP retained some upside, however, as economists speculated that the Bank of England (BoE) will likely stick to a hawkish narrative in the weeks ahead.
Today’s consumer credit data may influence Sterling, alongside the UK’s finalised manufacturing PMI. If consumer credit increased as expected in January, GBP could enjoy tailwinds.
Euro (EUR) Weakened by Sanction Concerns
The Euro (EUR) tumbled yesterday, as EUR investors expressed concern over the potential for Russia to disrupt energy supplies to Europe in response to new Western sanctions announced over the weekend.
Further undermining EUR sentiment were some dovish comments from European Central Bank (ECB) policymaker Fabio Panetta.
Panetta argued that the central bank should proceed with ‘a light touch’ in the midst of uncertain trading conditions, as ‘it would be unwise to pre-commit on future policy steps until the fallout from the current crisis becomes clearer.’
If the preliminary German inflation estimate increases to 5.1% tomorrow, the single currency may be bolstered as pressure increases upon the ECB to raise interest rates.
US Dollar (USD) Relinquishes Gains on Improving Market Mood
The US Dollar (USD) jumped against the majority of its peers on Monday before sliding back down as risk appetite recovered.
This dramatic reversal in USD came as cautious hopes for a ceasefire in Ukraine helped to offset concerns about the potential global economic impact of new sanctions on Russia.
Into today, America’s ISM manufacturing PMI could influence USD movement – if manufacturing activity increased in February as expected, the US Dollar is likely to receive a boost.
Canadian Dollar (CAD) Wavers on Mixed Trading Stimulus
The Canadian Dollar (CAD) fluctuated at the beginning of the week as rising oil prices buoyed the ‘Loonie’ while weak current account data applied downside.
Canadian GDP may affect trading today – if the economy expanded by 1.6% as expected last quarter, CAD could enjoy further upside.
New Zealand Dollar (NZD) Rises despite Poor Business Confidence
The New Zealand Dollar (NZD) tumbled at the start of yesterday’s session, as risk-off trading and poor business sentiment subdued the ‘Kiwi’. ANZ business confidence fell to -51.8 in February: almost double the expected drop to -26.5.
Data Releases
Mar 1st 08:00 AUD Markit Manufacturing PMI Final (Feb) 57.6
Mar 1st 13:30 AUD RBA Interest Rate Decision 0.1%
Mar 1st 17:00 EUR German Retail Sales (Jan) 1.5%
Mar 1st 18:55 EUR German Markit Manufacturing PMI Final (Feb) 58.5
Mar 1st 19:00 EUR Markit Manufacturing PMI Final (Feb) 58.4
Mar 1st 19:30 GBP BoE Consumer Credit (Jan) £1.05bn
Mar 1st 19:30 GBP Markit/CIPS Manufacturing PMI Final (Feb) 57.3
Mar 1st 23:00 EUR German Inflation Rate Prelim (Feb) 5.1%
Mar 1st 23:30 CAD GDP Growth Rate (Q4) 1.6%
Mar 2nd 00:30 CAD Markit Manufacturing PMI (Feb) 57
Mar 2nd 00:45 USD Markit Manufacturing PMI Final (Feb) 57.5
Mar 2nd 01:00 USD ISM Manufacturing PMI (Feb) 58