Australian Dollar (AUD) Rises as Risk Sentiment Improves
The Australian Dollar (AUD) climbed in midweek trade, as it seemed that negotiations between Ukraine and Russia were making progress.
According to Russian foreign minister Sergei Lavrov, there are now ‘no obstacles’ to a meeting between the Russian and Ukrainian leaders, which may be necessary to seal concrete agreements currently being worked out by the two delegations.
Australia’s employment data may influence AUD trading today: the country’s unemployment rate is expected to have fallen in February, potential lending support to the ‘Aussie’.
New Zealand Dollar (NZD) Firms on GDP Optimism
The New Zealand Dollar (NZD) rose overall on Wednesday, amid optimism ahead of New Zealand’s latest GDP release.
Also buoying the ‘Kiwi’ was a risk-on trading sentiment, fuelled by positive comments regarding ‘peace talks’ between Ukraine and Russia.
Looking ahead, NZD exchange rates could strengthen today as New Zealand’s latest GDP figures are expected to report a strong rebound in growth in the fourth quarter of 2021.
Pound (GBP) Strengthens ahead of BoE Decision
The Pound (GBP) was supported yesterday by an upbeat market mood, as well as optimism relating to the Bank of England (BoE)’s interest rate decision.
Ahead of the event, 44 of 49 economists polled by Reuters agreed that the Monetary Policy Committee is likely to proceed with a 25 bps interest rate hike, as inflationary pressures mount.
If the BoE hike by 25 or even 50 bps, Sterling will likely enjoy upside – tailwinds may be more pronounced if policymakers strike a hawkish tone.
Euro (EUR) Buoyed by USD Downside, Risk-On Mood
The Euro (EUR) firmed against the majority of its peers on Wednesday, as downside in the US Dollar lent support due to the currencies’ strong negative correlation.
Risk-on trading sentiment also bolstered the single currency amidst hopes for a negotiated end to the war in Ukraine.
Looking ahead, if finalised Euro area inflation prints at or above the 5.8% expected, EUR could find support on hopes of policy tightening from the European Central Bank (ECB).
US Dollar (USD) Sinks on Disappointing Retail Data
The US Dollar (USD) trended down midweek as risk-sentiment improved, drawing support away from safe-haven currencies.
Also weighing upon the ‘Greenback’, February’s retail sales grew by less than expected – and far less than in January. Rising inflation limited purchasing power, as sales fell at non-store retailers, health and personal care stores, furniture stores and food and beverage stores.
Jobs data and industrial production statistics could influence USD trading today: initial jobless claims are expected to have fallen in March, lending potential upside.
Canadian Dollar (CAD) Ticks Up on Stronger-than-Expected Inflation
The Canadian Dollar (CAD) firmed overall yesterday as inflation exceeded expectations, putting pressure upon the Bank of Canada (BoC) to tighten monetary policy.
Oil prices continued to sink however, capping ‘Loonie’ gains.
Data Releases
Mar 17th 10:30 AUD Unemployment Rate (Feb) 4.1%
Mar 17th 10:30 AUD Employment Change (Feb) 37K
Mar 17th 10:30 AUD RBA Bulletin N/A
Mar 17th 19:30 EUR ECB Lagarde Speech N/A
Mar 17th 20:00 EUR Finalised Inflation Rate (Feb) 5.8%
Mar 17th 20:15 EUR ECB Lane Speech N/A
Mar 17th 22:00 GBP BoE Interest Rate Decision 0.75%
Mar 17th 22:30 USD Initial Jobless Claims (12/Mar) 220K
Mar 17th 22:45 EUR ECB Schnabel Speech N/A
Mar 17th 23:15 USD Industrial Production (Feb) 0.5%