Australian Dollar (AUD) Strengthens on Iron Ore Rebound
The Australian Dollar (AUD) rose against its peers on Friday as the price of iron ore climbed following a brief downturn.
While risk-off headwinds exerted some downside, commodity prices countered the effect. Tailwinds from China also buoyed the ‘Aussie’, as President Xi Jinping assured the US that conflicts and confrontations are not in the interests of anyone.
Looking ahead, a lack of AU data leaves the Australian Dollar to trade on external factors today. If Ukraine and Russia make progress in peace talks, risk-on sentiment may support AUD.
New Zealand Dollar (NZD) Wavers on Lack of Data
The New Zealand Dollar (NZD) fluctuated at the end of last week, as a lack of NZ data exposed the currency to losses.
Strength in the Australian Dollar lent some support, but the ‘Kiwi’ was pressured by risk-off headwinds as a western official told Reuters there is still a very big gap between the positions of Ukraine and Russia.
Tomorrow, consumer confidence data may influence NZD exchange rates. Morale is expected to have increased in Q1 2022, albeit marginally – lending possible ‘Kiwi’ upside.
Pound (GBP) Trades Mixed on Volatile Trading Sentiment
The Pound (GBP) traded in a mixed range against its peers on Friday, as low risk sentiment depressed Sterling against safe-haven rivals while lifting it against perceived-riskier currencies.
A lack of UK data further limited GBP upside, while hopes for consecutive interest rate hikes from the Bank of England (BoE) capped losses.
A lack of UK data leaves the Pound to trade on risk sentiment today. Ahead of the UK inflation report, investors may trade optimistically on hopes that it will pressure the BoE to hike rates further.
Euro (EUR) Dented by Considerable Trade Deficit
The Euro (EUR) fell at the end of last week, as the Euro area’s trade balance printed at €-27.2bn rather than the €-2.6bn expected.
According to Eurostat, this was the third consecutive month of shortfall, and a substantially larger figure than in the previous two months. Driving the data, the cost of energy product imports more than doubled in January from a year earlier.
Germany’s Producer Price Index may influence trading today – investors are likely to be disappointed if February’s PPI increases by less than in January, reducing pressure upon the European Central Bank (ECB) to tighten monetary policy.
US Dollar (USD) Bolstered by Risk-Off Mood
The US Dollar (USD) found support on Friday, as risk-off sentiment drew support towards safe-haven currencies.
Despite a lack of significant data, the ‘Greenback’ climbed against the majority of its peers as progress in negotiations between Ukraine and Russia was called into question.
Speeches from the Federal Reserve’s Raphael Bostic and Chairman Jerome Powell may affect trading today, with hawkish rhetoric likely to supply USD tailwinds.
Canadian Dollar (CAD) Boosted as Retail Sales Impress
The Canadian Dollar (CAD) gained against its peers at the end of last week, as positive retail data buoyed the currency.
Sales increased by 3.2% – above expectations – in January, while ADP employment data revealed 475K new hires in February as opposed to the 120K forecast.
Data Releases
Mar 21st 17:00 EUR German PPI (February) 1.7%
Mar 21st 17:30 EUR ECB Lagarde Speech N/A
Mar 21st 22:00 USD Fed Bostic Speech N/A
Mar 21st 22:30 USD Chicago Fed National Activity Index (Feb) 0.75
Mar 22nd 02:00 USD Fed Chair Powell Speech N/A
Mar 22nd 07:00 NZD Westpac Consumer Confidence (Q1) 99.3