Australian Dollar (AUD) Strengthens on Commodity Prices
The Australian Dollar (AUD) climbed against the majority of its peers on Tuesday, despite a comparatively risk-off mood, as rising commodity prices buoyed the currency.
Sanctions on Russian energy boded well for Australian energy exports, with shares in AU suppliers up as much as 10%; coal and iron ore trended up in price on a day-by-day basis.
New PMI data is likely to influence trading tomorrow – in today’s session the ‘Aussie’ will likely trade on risk sentiment, receiving possible tailwinds if Russian attacks on Ukraine slacken.
New Zealand Dollar (NZD) Boosted on Commodities, AU Strength
The New Zealand Dollar (NZD) spiked against its peers yesterday, supported by rising commodity prices and ‘Aussie’ tailwinds.
Prices climbed of New Zealand’s main export, dairy – in the form of both milk and cheese – alongside rising strength in the Australian Dollar.
A lack of data leaves NZD to trade on external factors today – the New Zealand Dollar may benefit if market mood improves.
Pound (GBP) Firms on BoE Anticipation, Spring Budget Hopes
The Pound (GBP) rose on Tuesday as investors recovered confidence in the currency after last week’s Bank of England (BoE) comments. Markets now hope for a further 25bps interest rate hike in May, which would be the fourth in a row.
Lending further Sterling support are upbeat comments regarding Rishi Sunak’s Spring budget, in which the Chancellor is expected to announce how he plans to help families struggling with the cost of living.
Sunak’s budget reveal could lend the Pound support if a cut on fuel duty is promised; UK inflation data may lend further upside if it continued to surge in February as forecast.
Euro (EUR) Sinks on Risk-Off Headwinds
The Euro (EUR) tumbled yesterday as unsteady risk appetite weighed upon the single currency.
Further conflict in Ukraine dented market sentiment, as UN secretary-general António Guterres described the war as ‘unwinnable’; Ukraine’s foreign ministry reported 2,389 children from Donetsk and Luhansk as having been ‘kidnapped’ by Russian forces.
Lending some support are speculations that the European Central Bank may hike interest rates twice in 2022. If data released tonight shows consumer confidence fell again this morning, EUR may face pressure.
US Dollar (USD) Slips despite Stronger Fed Outlook
The US Dollar (USD) slid lower on Tuesday despite more hawkish messaging from the Federal Reserve in recent days.
Exerting possible downside upon the currency are weakening relations between the US and Russia, as Vladimir Putin accuses US President Joe Biden of making ‘unacceptable statements’. Biden referred to Putin as a ‘war criminal’ during talks with European allies over the Ukraine war.
A speech today from Fed Chairman Jerome Powell may restore some upside to USD exchange rates, if he strikes a hawkish tone in a speech later tonight.
Canadian Dollar (CAD) Weakens as Oil Prices Decline
The Canadian Dollar (CAD) fell yesterday, as oil prices dipped having reached over $110 per barrel on Monday. Analysts believe the currency may attract fresh support, however, due to tighter policy from the Bank of Canada (BoC) and positive seasonal trends.
Data Releases
Mar 23rd 17:00 GBP UK Inflation Rate (Feb) 5.9%
Mar 23rd 18:00 EUR ECB Non-Monetary Policy Meeting N/A
Mar 23rd 22:00 USD Fed Chair Powell Speech N/A
Mar 23rd 22:30 GBP Spring Budget 2022 N/A
Mar 24th 01:00 EUR Consumer Confidence Flash (Mar) -12.9
Mar 24th 01:45 USD Fed Daly Speech N/A