Australian Dollar (AUD) Buoyed by Upbeat Market Sentiment
The Australian Dollar (AUD) struck higher yesterday as a prevailing risk-on mood buoyed the appeal of the ‘Aussie’.
This came as authorities in China confirmed lockdown measures in Shanghai would start to be eased from Wednesday.
Looking ahead, trade in the Australian Dollar may be a little more subdued today as AUD investors await the publication of Australia’s latest GDP figures later in the week.
New Zealand Dollar (NZD) Lifted by Risk-On Mood
The New Zealand Dollar (NZD) also ticked higher on Monday as the risk-sensitive ‘Kiwi’ also benefited from a positive market mood.
Coming up, will another weak business confidence reading undermine NZD demand today?
Pound (GBP) Muted amid Lull in Data
The Pound (GBP) was mostly rangebound at the start of this week’s session, amid the absence of any notable UK economic data.
GBP investors continued to digest the UK’s new cost-of-living fiscal package. While Chancellor Rishi Sunak has been lauded for his support for households, analysts warn that similar measures are needed for UK businesses to prevent thousands of firms from going bust.
The UK’s latest consumer credit figures could provide fresh direction to the Pound today. If credit remained elevated in April, it could raise concerns that consumers are needing to borrow more to make ends meet.
Euro (EUR) Firms on Stronger-Than-Expected German Inflation
The Euro (EUR) ticked higher on Monday, with the single currency drawing support from Germany’s consumer price index.
May’s preliminary CPI figures reported German inflation climbed to a near 50-year high of 7.9%. This helped to bolster expectations for the European Central Bank’s (ECB) July interest rate hike.
The Eurozone CPI release could also print above expectations today and help extend the Euro’s bullish momentum.
US Dollar (USD) Weakens in Holiday Thinned Trade
The US Dollar (USD) got off to a poor start this week, with the closure of US markets for the Labor Day weekend resulting in thin trading conditions in the ‘Greenback’.
Further undermining USD exchange rates was growing speculation that the Federal Reserve could pause its tightening cycle following its next couple of interest rate hikes.
The reopening of US markets could allow the US Dollar to show a little more resilience today, although a weak consumer confidence reading could limit the ‘Greenback’s upside potential.
Canadian Dollar (CAD) Strengthens as Oil Prices Climb Above $120
The Canadian Dollar (CAD) rallied on Monday, with demand for the commodity-linked currency being underpinned by accelerating oil prices.
Coming up, will a robust Canadian GDP reading help to prop up demand for the ‘Loonie’ today?
Data Releases
May 31st 11:00 NZD ANZ Business Confidence (May) -38
May 31st 17:55 EUR German Unemployment Rate (May) 5%
May 31st 18:30 GBP BoE Consumer Credit (Apr) £1.2bn
May 31st 19:00 EUR Inflation Rate (May) 7.7%
May 31st 10:30 CAD GDP (Q1) 1.4%