Australian Dollar (AUD) Skyrockets Following Hawkish RBA Rhetoric
The Australian Dollar (AUD) shot high against its peers on Tuesday following hawkish forward guidance from the Reserve Bank of Australia (RBA).
Although the central bank left interest rates unchanged, policymakers removed the words ‘patient’ and ‘highly supportive monetary conditions’ from their statement and alluded to pandemic emergency settings in the past tense.
Looking ahead, today’s chart pack may expand upon the themes of the statement: traders have already started pricing in an interest rate hike as early as June.
New Zealand Dollar (NZD) Bolstered by AUD Strength
The New Zealand Dollar (NZD) climbed yesterday as a strong uptick in the ‘Aussie’ supported its antipodean cousin.
Despite renewed tensions between Ukraine and Russia dampening risk sentiment, the prospect of further sanctions continue to cause supply concerns, benefitting commodity currencies like the ‘Kiwi’.
A lack of significant data leaves NZD to trade on external factors today. A risk-on mood may lend upside, though rising commodity prices may be sufficient to cap ‘Kiwi’ losses.
Pound (GBP) Fluctuates Following Upbeat PMI Data
The Pound (GBP) benefitted on Tuesday from an upbeat services PMI, capping losses for the currency amidst risk-off trading headwinds.
Service-sector activity rose to 62.6 in March, from 60.5 in February and above forecasts of 61, as survey respondents noted that the removal of pandemic restrictions had led to a sharp rebound in customer demand.
Sterling will likely be directed by risk sentiment through today’s session, enjoying potential upside should the peace process between Ukraine and Russia show signs of progression.
Euro (EUR) Dips in Spite of Strong Services Data
The Euro (EUR) slumped yesterday as Ukraine concerns continued to take their toll on the single currency.
Despite better-than-expected service-sector PMIs in both Germany and the Euro area, suspicions that Russian forces had targeted civilians in their attacks upon Ukraine weakened the possibility of diplomatic progress between the warring countries.
German factory orders may affect the single currency today: if orders fell by 0.2% in February, as expected, EUR might fall further against its peers.
US Dollar (USD) Benefits from Safe-Haven Appeal
The US Dollar (USD) traded in a mixed range on Tuesday as risk-off trading supplied upside, but investor sentiment remained subdued over weaker-than-expected services data.
Risk appetite remained weak as climbing numbers of deaths and casualties in Ukraine dampened morale – which drew support towards safe-haven assets. Nevertheless, service-sector PMIs revealed weaker growth than expected, capping USD gains.
Tomorrow’s FOMC minutes are likely to affect ‘Greenback’ exchange rates: if Federal Reserve policymakers strike a hawkish chord, the US Dollar could firm.
Canadian Dollar (CAD) Unfazed by Trade Balance Miss
The Canadian Dollar (CAD) shrugged off the release of a smaller-than-expected trade surplus yesterday, as rising oil prices continued to lend upside.
Tomorrow’s Ivey PMI may affect the ‘Loonie’ – if business conditions fell in March as expected, CAD might come under pressure.
Data Releases
Apr 6th 11:30 AUD RBA Chart Pack N/A
Apr 6th 16:00 EUR German Factory Orders (Feb) -0.2%
Apr 6th 17:30 EUR German S&P Global Construction PMI (Mar) 54.2
Apr 6th 23:30 USD Fed Harker Speech N/A
Apr 7th 00:00 CAD Ivey PMI s.a. (Mar) 60
Apr 7th 04:00 USD FOMC Minutes N/A