Australian Dollar (AUD) Firms as Unemployment Falls
The Australian Dollar (AUD) was supported through yesterday’s session as Australia’s unemployment rate fell by more than expected, to 4%.
Also buoying the ‘Aussie’ was an overall risk-on mood, as peace talks between Russia and Ukraine appeared to be making progress: Ukrainian defence minister Oleksii Reznikov said lawyers were involved in drawing up joint documents.
Looking ahead, a lack of Australian data leaves AUD to trade on external factors today. Further talk of peace agreements between Ukraine and Russia could buoy the ‘Aussie’ via risk-on tailwinds.
New Zealand Dollar (NZD) Climbs on Strong Risk Appetite
The New Zealand Dollar (NZD) rose overall on Thursday, as a strong risk appetite lifted the currency, fuelled by hopes of diplomatic progress over the Ukraine crisis.
However, these gains were tempered by New Zealand’s latest GDP release as growth fell short of expectations the economy expanded by 3% in the fourth quarter rather than 3.2% as forecast
A lack of data leaves the New Zealand Dollar to trade in response to market risk sentiment today.
Pound (GBP) Tumbles as BoE Vote Not Unanimous
The Pound (GBP) fell sharply against its peers yesterday as the Bank of England (BoE)’s interest decision disappointed markets.
While the central bank hiked interest rates by 25bps as expected, policymakers were not united in the decision – commentary from the meeting minutes also struck a dovish tone, warning that global inflationary pressures will strengthen considerably in the coming months.
Into today, a lack of UK data will expose Sterling to further pressure. If risk sentiment remains high, however, GBP could recoup some losses.
Euro (EUR) Firms on Higher-Than-Expected Inflation
The Euro (EUR) was buoyed on Thursday by a larger-than-expected increase in the bloc’s Consumer Price Index.
Annual inflation increased by 5.9% according to February’s finalised figures, putting pressure upon the European Central Bank (ECB) to tighten monetary policy.
Messaging from Europe’s central bank was mixed, with Isabel Schnabel defending a cautious approach while Klass Knot suggested that a Q4 rate hike could be on the cards.
The Eurozone’s trade balance could influence trading today, as the area’s trade deficit is expected to reduce to €-2.6bn. If the data prints as expected, EUR may enjoy tailwinds.
US Dollar (USD) Remains Weaker on Stronger Market Mood
The US Dollar (USD) trended down against the majority of its peers yesterday, depressed by a risk-on trading attitude.
The safe-haven ‘Greenback’ relinquished earlier gains as investors flocked to perceived riskier assets – losses were capped, however, by upbeat jobs data. Initial jobless claims fell to 214K in the second week of March – the lowest number in 10 weeks.
Speeches from Federal Reserve policymakers could affect USD exchange rates at the end of this week – if speakers strike a hawkish tone, the US Dollar may find support.
Canadian Dollar (CAD) Wavers amidst Lack of Data
The Canadian Dollar (CAD) traded in a mixed range on Thursday, as a lack of data exposed the ‘Loonie’ to external factors. Risk-on trading lent some support, alongside climbing oil prices.
Into today, retail data may bolster CAD, as sales are expected to have increased by 2.4% in January.
Data Releases
Mar 18th 20:00 EUR Balance of Trade (Jan) €-2.6bn
Mar 18th 22:30 CAD Retail Sales (Jan) 2.4%
Mar 18th 22:30 CAD ADP Employment Change (Feb) 120K
Mar 19th 02:30 USD Fed Barkins Speech N/A
Mar 19th 04:00 USD Fed Evans Speech N/A
Mar 19th 05:00 USD Fed Bowman Speech N/A