Australian Dollar (AUD) Fluctuates on Mixed Risk Sentiment
The Australian Dollar (AUD) initially recouped some of its weekly losses on Friday, as upbeat trading sentiment lent tailwinds to the perceived-riskier currency.
‘Aussie’ gains were tempered later in the session however, by rising Covid cases in Shanghai and Beijing. Both Chinese cities are under threat of fresh lockdowns, weighing upon AUD as a proxy for the Chinese economy.
Into today, a lack of Australian data leaves the ‘Aussie’ to trade on external factors including risk sentiment. If markets remain upbeat, AUD could enjoy further gains.
New Zealand Dollar (NZD) Finds Support as Commodity Prices Rise
The New Zealand Dollar (NZD) trended up against several peers at the end of last week, as risk-on sentiment boosted the currency alongside rising commodity prices.
Looking ahead, the ‘Kiwi’ is likely to trade on risk appetite but may also be affected by AUD and Chinese currency dynamics throughout today’s session.
Pound (GBP) Sinks on Brexit Concerns
The Pound (GBP) faltered on Friday, as worries over the Northern Ireland protocol drew support away from the currency.
Several politicians expressed doubts over controversial legislation to override the Northern Ireland protocol, which will be published on Monday – with some suggesting it could trigger a UK-EU trade war.
UK GDP data may also affect Pound trading today, lending Sterling possible tailwinds if the economy expanded in May as forecast.
Euro (EUR) Wavers on Lack of Significant Data
The Euro (EUR) traded erratically at the end of last week, succumbing to pressure against several peers in the wake of Thursday’s European Central Bank (ECB) rate decision.
Given a lack of EU data on Friday, the single currency wavered as investors digested the implications of a bullish ECB. While higher interest rates generally boost morale, markets are worried that tighter monetary policy could threaten global economic growth.
EUR may continue to face pressure into today’s session, as a further lack of data exposes the currency to external factors.
US Dollar (USD) Boosted by CPI Release
The US Dollar (USD) enjoyed upside on Friday as US inflation printed above expectations, supporting the Federal Reserve’s aggressive policy tightening stance.
Both overall and core inflation rose, with the former hitting 8.6% – the highest it’s been since December 1981. Energy prices rose 34.6% – the most since September of 2005 – due to the increased price of gasoline, fuel oil, electricity, and natural gas.
A speech tomorrow from the Fed’s Lael Brainard may buoy USD further, if she strikes a hawkish tone.
Canadian Dollar (CAD) Firms on Employment Data
The Canadian Dollar (CAD) received support at the end of last week, as Canada’s unemployment rate fell to 5.1% rather than remaining at 5.2% as expected.
A lack of Canadian data leaves the ‘Loonie’ to trade on external factors and commodity dynamics today. If oil prices continue to slide, CAD may succumb to pressure.
Data Releases
Jun 13th 16:00 GBP GDP (Apr) 0.2%
Jun 13th 16:00 GBP Manufacturing Production (Apr) 1.8%
Jun 13th 16:00 GBP Industrial Production (Apr) 1.7%
Jun 14th 04:00 USD Fed Brainard Speech