Australian Dollar (AUD) Buoyed by Signs of Financial Stability
Despite an initial risk-off mood at the start of Monday’s European session, the Australian Dollar (AUD) climbed on emerging signs of stability in the financial markets.
Weakness in the US Dollar (USD) supported the ‘Greenback’s risk-on peers while a drop in iron ore prices failed to dent AUD appetite.
Today, minutes from the Reserve Bank of Australia’s (RBA) latest meeting may inspired further AUD upside if a hawkish policy outlook is accompanied by minimal references to the possibility of a recession.
New Zealand Dollar (NZD) Firms as Risk Sentiment Recovers
The New Zealand Dollar (NZD) firmed at the start of the week as risk appetite improved following a bearish start to the session, but swiftly recovered amidst a rebound in market sentiment.
A lack of NZ data leaves the New Zealand Dollar to trade today on external headwinds and AUD dynamics. If RBA Chairman Powell’s speech inspires ‘Aussie’ tailwinds, NZD may also climb.
Pound (GBP) Subdued on Lack of UK Data
The Pound (GBP) traded without a strong directional bias yesterday as a lack of significant UK data limited trading opportunities.
Bank of England (BoE) policymaker Catherine Mann further dampened Sterling appeal with comments that ‘incoming data suggest an increasingly stark trade-off in terms of rising and persistent inflation versus deteriorating real income’.
Data from the Confederation of British Industry (CBI) could sap Pound appeal today, if it records a fall in June’s industrial trends, as expected.
Euro (EUR) Bolstered by ECB Optimism
The Euro (EUR) began Monday’s European session trading up against several peers, although it surrendered some of its gains following comments the European Central Bank (ECB) President Christine Lagarde.
Markets expect the ECB to tighten monetary policy consecutively in July and September and while Lagarde did not deny this, she drew attention to ‘Euro area activity’ which is ‘being dampened by high energy costs, intensified supply disruptions and greater uncertainty.’
Further speeches from ECB officials could affect the single currency today, Any dovish commentary potentially weighing upon the Euro.
US Dollar (USD) Slumps as US Markets Closed
The US Dollar (USD) traded in a limited range on Monday, as markets were closed for the ‘Juneteenth’ federal holiday.
USD found some safe-haven support at the start of the session on subdued market sentiment – but encountered headwinds in the form of a decline in US bond yields.
Elsewhere, aggressive rate hike bets from the Federal Reserve were reinstated as markets brace for Fed Chair Powell’s semi-annual testimony to Congress.
Speeches from Fed representative Tom Barkin could lend support to the US dollar today, if Barkin strikes a hawkish tone.
Canadian Dollar (CAD) Dented by Falling Oil Prices
The Canadian Dollar (CAD) dipped against its peers yesterday as crude oil prices fell on worries that softening global economic growth could damage fuel demand.
Retail data is forecast to reveal an increase in April’s sales today, potentially buoying the ‘Loonie’ regardless of oil dynamics.
Data Releases
Jun 21st 10:00 AUD RBA Gov Lowe Speech N/A
Jun 21st 11:30 AUD RBA Meeting Minutes N/A
Jun 21st 20:00 GBP CBI Industrial Trends Orders (Jun) 22
Jun 21st 22:30 CAD Retail Sales (Apr) 0.8%
Jun 21st 22:30 USD Chicago Fed National Activity Index (May) 0.32
Jun 22nd 01:00 USD Fed Barkin Speech N/A