Australian Dollar (AUD) climbs on RBA Optimism
The Australian Dollar (AUD) rose at the end of last week, following comments from Reserve Bank of Australia (RBA) Governor Philip Lowe in which he said he does not expect to see Australia slip into a recession.
Earlier in the week, Lowe had indicated that the bank was considering either a 25bps or 50bps rate hike in July – with fears of a recession reduced, there is arguably less need for moderation in tightening monetary policy.
Today, a lack of Australian data leaves the ‘Aussie’ to trade on external factors. If risk sentiment is low, AUD may sink against its peers.
New Zealand Dollar (NZD) Firms as Market Mood Improves
The New Zealand Dollar (NZD) found support in the second half of Friday’s European session as market mood improved.
NZD is likely to trade on risk sentiment and commodity dynamics today, amid a lack of significant New Zealand data.
Pound (GBP) Muted Following Slump in Retail Sales
The Pound (GBP) was left subdued at the end of last week following the publication of the UK’s latest retail sales data, as they reported sales growth declined last month.
Further limiting Sterling’s upside potential was UK political uncertainty after the Conservatives lost another two seats in Thursday’s byelections, raising fresh doubts over Boris Johnson’s premiership.
If Johnson continues to come under sustained criticism from within and outside of the party, the Pound may fall at the start of this week on fears of systemic change.
Euro (EUR) Dented by German Ifo Data
The Euro (EUR) encountered headwinds on Friday, trading in a mixed range as Germany’s Ifo business climate indicator fell below expectations.
Markets expected the data to print at 92.9 – a 0.1 drop on May’s release – but instead the index fell to 92.3. The Ifo institute reported that manufacturing companies were considerably more pessimistic about the second half of this year.
The single currency may be influenced by US Dollar (USD) dynamics today, succumbing to pressure if US data prints as expected and boosts the ‘Greenback’.
US Dollar (USD) Ticks Lower on Improved Market Sentiment
The US Dollar stumbled at the end of last week, subdued by growing risk appetite in the currency markets.
Adding to pressure on USD exchange rates, June’s finalised Michigan consumer sentiment release missed expectations, printing at 50 rather than the 50.2 forecast. This marked the lowest reading on record as approximately 79% of consumers expected bad times in the year ahead for business conditions.
Durable goods orders could affect ‘Greenback’ trading today, with a 0.1% increase potentially lending USD support. If the Dallas Fed manufacturing index for June also climbs, as forecast, tailwinds may be greater still.
Canadian Dollar (CAD) Wavers on Lack of Data
The Canadian Dollar (CAD) traded in a mixed range on Friday, though firmed against several of its peers as crude oil prices rose.
Oil trading conditions are likely to affect the ‘Loonie’ at the start of this week likewise, given a lack of Canadian data.
Data Releases
Jun 27th 22:30 USD Durable Goods Orders (May) -0.4%
Jun 28th 00:30 USD Dallas Fed Manufacturing Index (Jun) 1