Australian Dollar (AUD) Trends Up on Ukraine Optimism
The Australian Dollar (AUD) rose on Monday as markets were optimistic regarding peace prospects between Ukraine and Russia.
Despite Ukraine accusing Russia of committing genocide as a mass civilian grave was uncovered near Kyiv, a top Ukrainian negotiator said the two countries agree on enough elements of a potential peace deal that it is ready to be discussed between Presidents Putin and Zelensky.
Today’s interest rate decision will be in the spotlight. The Reserve Bank of Australia (RBA) is expected to keep interest rates unchanged, but some hawkish forward guidance could bolster
New Zealand Dollar (NZD) Benefits from AUD Upside
The New Zealand Dollar (NZD) climbed yesterday as strength in the Australian Dollar lent support.
Also buoying the ‘Kiwi’ was a stable equity market which, alongside risk-on tailwinds, encouraged traders to invest in perceived-riskier assets.
A lack of significant NZ data leaves the New Zealand Dollar to trade on external factors today – if negotiations between Ukraine and Russia progress, NZD could strengthen further.
Pound (GBP) Wavers on Lack of Data
Trade in the Pound (GBP) was mixed at the beginning of the week. While risk flows lent support, cost of living concerns continued to limit GBP demand.
Sterling was also exposed to losses via a lack of data and a dovish tone from the Bank of England (BoE). Policymakers are quick to emphasise the economic volatility inspired by conflict in Ukraine.
Today’s finalised services PMI could bolster GBP sentiment, as service-sector activity is forecast to have increased in March.
Euro (EUR) Subdued by Russian Energy Dependency
The Euro (EUR) slumped on Monday as Ukraine’s allies called upon Eurozone countries to divest from Russian energy.
Despite the fact of Russian energy payments strengthening the Rouble (RUB), EU officials were unable to commit to complete divestment, as European countries have 40% of their energy needs met by Russia.
Both German and Euro area services PMIs may pressure the single currency today, as service-sector activity looks to have fallen across the bloc.
US Dollar (USD) Tumbles on Bullish Market Mood
The US Dollar (USD) fell against several peers yesterday as upbeat market sentiment sapped demand for the currency.
While USD attracted support early in the session as news of Russian atrocities in Bucha soured hopes for peace in Ukraine, ongoing diplomatic efforts buoyed investors’ spirits. Moreover, a reduction in US factory orders in February limited USD upside.
US PMI data could support the ‘Greenback’ today, however, as both ISM and S&P PMIS are expected to reveal an increase in service-sector activity.
Canadian Dollar (CAD) Edges Up on Oil Tailwinds
The Canadian Dollar (CAD) firmed at the beginning of the week as climbing crude prices buoyed the commodity-linked currency.
Looking ahead, Canada’s trade balance is expected to have increased in February, potentially lending further upside to the ‘Loonie’.
Data Releases
Apr 5th 09:00 AUD S&P Global Services PMI Final (Mar) 57.9
Apr 5th 14:30 AUD RBA Interest Rate Decision 0.1%
Apr 5th 17:55 EUR German S&P Global Services PMI Final (Mar) 55
Apr 5th 18:00 EUR S&P Global Services PMI Final (Mar) 54.8
Apr 5th 18:30 GBP S&P Global/CIPS UK Services PMI Final (Mar) 61
Apr 5th 22:30 CAD Balance of Trade (Feb) C$42.9bn
Apr 5th 22:30 USD Balance of Trade (Feb) $-88.5bn
Apr 5th 23:45 USD S&P Global Services PMI Final (Mar) 58.9
Apr 6th 00:00 USD ISM Non-Manufacturing PMI (Mar) 58.4
Apr 6th 00:00 USD Fed Kashkari Speech N/A
Apr 6th 00:00 USD Fed Brainard Speech N/A
Apr 6th 01:05 USD Fed Brainard Speech N/A
Apr 6th 04:00 USD Fed Williams Speech N/A