Australian Dollar (AUD) Strengthens on RBA Hike
The Australian Dollar (AUD) firmed on Tuesday following the decision of the Reserve Bank of Australia (RBA) to hike interest rates by 25bps.
Economists had forecast a 15bps rate hike and received the data positively; the ‘Aussie’ jumped by over 50-pips against the US Dollar (USD) in response.
Into today, further analysis of the RBA’s forward guidance could buoy the Australian Dollar if the central bank’s tone is hawkish; rising retail sales in March may also lend the ‘Aussie’ some support.
New Zealand Dollar (NZD) Wavers despite AUD Upside
The New Zealand Dollar (NZD) weakened yesterday despite the upside in its antipodean cousin and a more positive market mood.
A press conference with the Reserve Bank of New Zealand (RBNZ) may influence NZD trading today – if a hawkish tone is struck, the ‘Kiwi’ may firm.
Pound (GBP) Enjoys Upside on UK Yields
The Pound (GBP) ticked up on Tuesday as a jump in the long-term UK yields supported upside in the currency.
Also boosting Sterling was a better-than-expected PMI reading for April. Manufacturing activity increased to 55.8 rather than 55.3, according to finalised data.
Looking ahead, movement in the Pound is likely to be limited today as GBP investor brace for the Bank of England’s (BoE) interest rate decision later in the week.
Euro (EUR) Sentiment Lifts as Employment Data Disappoints
The Euro (EUR) rebounded yesterday despite downbeat jobs data from Germany and the Euro area.
The seasonally adjusted number of unemployed people in Germany fell by less than expected in April, while unemployment in the Euro area dropped only 0.1%. Meanwhile, profit-taking in the US Dollar buoyed the negatively correlated single currency.
Retail sales in the bloc are expected to have fallen in March, potentially applying pressure to the euro later this evening.
US Dollar (USD) Slides on Risk-On Trading
The US Dollar (USD) sank on Tuesday as an improving market mood drew support away from the safe-haven currency.
However these losses were tempered somewhat by the latest US factory order figures as they printed well above expectations.
USD investors are likely to trade cautiously today ahead of the Federal Reserve’s rate decision early tomorrow. The Fed is expected to hike rates to 1%.
Canadian Dollar (CAD) Trades Sideways ahead of Trade Balance
The Canadian Dollar (CAD) wavered against its peers yesterday, as crude prices lowered slightly.
Canada’s trade balance is forecast to reveal an increase in the country’s surplus today, which may buoy the ‘Loonie’ ahead.
Data Releases
4th May 08:45 NZD Employment Change (Q1) 0.1%
4th May 08:45 NZD Unemployment Rate (Q1) 3.2%
4th May 09:00 AUD S&P Global Services PMI Final (Apr) N/A
4th May 09:00 NZD RBNZ Press Conference N/A
4th May 11:30 AUD RBA Chart Pack N/A
4th May 11:30 AUD Retail Sales Prelim (Mar) 0.5%
4th May 16:00 EUR German Balance of Trade (Mar) €9.5B
4th May 17:55 EUR German S&P Global Services PMI Final (Apr) 57.9
4th May 18:00 EUR S&P Global Services PMI Final (Apr) 57.7
4th May 18:30 GBP BoE Consumer Credit (Mar) £1.3bn
4th May 19:00 EUR Retail Sales (Mar) -0.1%
4th May 22:15 USD ADP Employment Change (Apr) 395K
4th May 22:30 CAD Balance of Trade (Mar) C$3.9B
4th May 22:30 USD Balance of Trade (Mar) $-107bn
4th May 23:45 USD S&P Global Services PMI Final (Apr) 54.7
5th May 00:00 USD ISM Non-Manufacturing PMI (Apr) 58.5
5th May 04:00 USD Fed Interest Rate Decision 1%