Australian Dollar (AUD) Wavers Amidst Low Risk Appetite
The Australian Dollar (AUD) was subdued against several peers through yesterday’s session, as a risk-off mood dampened support for the currency.
Market sentiment remained bearish amid worries that aggressive moves by major central banks to constrain inflation could pose challenges to global economic growth.
Nevertheless, a hawkish stance from the Reserve Bank of Australia (RBA) earlier in the week continued to lend support to the ‘Aussie’.
Chinese data could inspire further AUD tailwinds today as the country’s balance of trade is expected to have increased in May to $58bn.
New Zealand Dollar (NZD) Tumbles on Data Shortage
The New Zealand Dollar (NZD) slumped against its rival currencies on Wednesday, as a lack of significant New Zealand data exposed the ‘Kiwi’ to losses as a risk-off mood prevailed.
Today, NZD may climb on upbeat Chinese data; conversely, the currency may fall further if risk appetite remains weak.
Pound (GBP) Weakens on Domestic Headwinds
The Pound (GBP) sank midweek as doubts pertaining to Boris Johnson’s leadership lingered, despite the PM’s winning a vote of confidence earlier in the week.
Alongside concerns regarding Johnson’s leadership, several high-profile MPs seemed dissatisfied with the Prime Minister’s hesitancy in implementing tax cuts, with one MP saying he would like to see the government do more.
Looking ahead, Sterling will take cues from risk sentiment and external factors today, given an ongoing lack of significant data.
Euro (EUR) Firms as EU Economy Strengthens in Q1
The Euro (EUR) was bolstered in yesterday’s European session as the latest GDP estimate revealed a greater-than-expected increase in Q1 economic growth.
According to the data, the Euro area economy expanded by 0.6% rather than the 0.3% forecast – net trade and inventories were the main drivers as exports increased by 0.4% while imports fell.
The European Central Bank’s interest rate decision will likely be the main driver of EUR movement today. If the ECB signals a July lift-off as expected, the single currency may continue to climb.
US Dollar (USD) Supported by Low Market Mood
The US Dollar (USD) enjoyed some upside early in Wednesday’s session as risk-off sentiment drew support towards the safe-haven currency.
The ‘Greenback’ then faced resistance as a lack of data exposed the currency to headwinds. It may be that investors were hesitant to place hawkish bets ahead of Friday’s CPI release – if inflation data reveals an easing of US price pressures, traders may pare back Federal Reserve rate hike bets.
US jobs data could influence the US Dollar today, sapping support for the currency if initial jobless claims increased last week as forecast.
Canadian Dollar (CAD) Climbs as Oil Prices Rise
The Canadian Dollar (CAD) rose against the majority of its peers midweek, as the price of WTI crude remained above $118 per barrel.
Looking ahead, tomorrow’s speeches from BoC Governor Tiff Macklem and Carolyn Rogers may buoy the Canadian Dollar if they strike a positive tone.
Data Releases
Jun 9th 21:45 EUR ECB Interest Rate Decision 0%
Jun 9th 22:30 EUR ECB Press Conference
Jun 9th 22:30 USD Initial Jobless Claims (4/Jun) 210K
Jun 9th 23:30 EUR ECB Macroeconomic Projections
Jun 10th 01:00 CAD BoC Gov Macklem Speech
Jun 10th 01:00 CAD BoC Gov Rogers Speech