Australian Dollar (AUD) Benefits from Upbeat Retail Sales
The Australian Dollar (AUD) continued to climb against its peers at the end of the week despite widespread risk aversion. The ‘Aussie’ is less affected by geopolitical tensions than other currencies, as Australia’s economy is less dependent upon Russian trade.
Also lending support to AUD, the country’s retail sales were confirmed to have risen by 1.8% in January, having fallen in December by 4.4%.
Into this week, central bank sentiment may dictate ‘Aussie’ movement. Reserve Bank of Australia (RBA) policymaker Michele Bullock is due to speak tomorrow – if she strikes a hawkish tone, AUD could enjoy tailwinds.
Pound (GBP) Falls on Weak Risk Sentiment
The Pound (GBP) tumbled against its peers on Friday as a lack of data exposed Sterling to low risk sentiment.
Following the seizure of a Ukrainian nuclear power plant by Russian forces overnight, Western foreign ministers convened in Brussels to discuss ways to support Ukraine – meanwhile, NATO reported that Russia is using cluster bombs in violation of international law.
A lack of significant data today leaves Sterling to continue trading on contextual factors. If Russia’s attack on Ukraine intensifies further, bearish trading could force GBP sentiment lower.
Euro (EUR) Subdued as German Trade Balance Misses Estimates
The Euro (EUR) closed last week’s session on a sour note, with the outbreak of a fire at Ukraine’s largest nuclear power plant following shelling by Russian forces, stoking concerns over European security.
This downtrend in EUR exchange rates was reinforced by the publication of Germany’s trade figures and Eurozone retail sales, both of which printed below expectations.
German factory orders may influence EUR exchange rates today, although any upside appears limited so long as the Ukraine crisis remains in the spotlight.
US Dollar (USD) Trends Up on Low Market Mood
The US Dollar (USD) rose against its rival currencies on Friday, receiving risk-off tailwinds on account of the Ukraine crisis.
Also buoying the ‘Greenback’ was an impressive non-farm payrolls report and greater-than-expected decline in unemployment. In response to the data, Federal Reserve policymaker Charles Evans said that US jobs numbers have been quite good for some time and the labour market is in a very good position.
Looking ahead, USD is likely to be affected by central bank dynamics and international tensions. A lack of diplomatic progress over the weekend may exacerbate risk-off sentiment today.
Canadian Dollar (CAD) Slumps despite Crude Oil Price Rise
The Canadian Dollar (CAD) fell against the majority of its peers at the end of last week, as climbing crude prices did little to divert risk-off headwinds.
New Zealand Dollar (NZD) Firms Overall on Commodity Tailwinds
The New Zealand Dollar (NZD) gained on Friday as commodity prices ticked up. The Ukrainian conflict led to a fresh surge in raw material prices, contributing to the relative outperformance of resource-linked currencies.
Data Releases
Mar 6th 17:00 EUR German Factory Orders (Jan) 1%
Mar 6th 17:00 EUR German Retail Sales (Jan) 1.5%