Australian Dollar Rises as Market Mood Stabilises
The Australian Dollar (AUD) firmed against its peers on Thursday as modest improvement in risk appetite and a better-than-expected Australian trade balance buoyed the currency.
Australia’s trade surplus printed at A$15.965bn for the month of May rather than A$10.725 as expected thanks to a sharp rise in the value of commodity exports.
Today, the ‘Aussie’ will likely trade on external factors, possibly extending its gains if market sentiment remains upbeat.
New Zealand Dollar (NZD) Bolstered by AUD Strength
The New Zealand Dollar (NZD) rose against its rival currencies yesterday, buoyed by a risk-on market mood.
If the upbeat mood continues to persist we may see the ‘Kiwi’ continue to climb today.
Pound (GBP) Attracts Upside as UK PM Resigns
The Pound (GBP) trended higher on Thursday as Prime Minister Boris Johnson succumbed to pressure from both within his party and resigned.
In a speech delivered outside Downing Street, Mr Johnson regretted that the ‘herd’ had effectively pushed him out of office; nevertheless, his deposition gave Sterling a boost as weeks of uncertainty over his premiership came to an end.
Further political developments may inform GBP movement today – if a near-term arrangement is agreed to ensure a smooth transition for the next PM, the Pound may rise again.
Euro (EUR) Support Dampened by Energy Crisis
The Euro (EUR) resumed its downtrend yesterday as recession fears persisted across the bloc amidst an ongoing energy price crisis.
Weaker-than-expected German industrial production data added to the pressure on EUR exchange rates as a shortage of primary products limited output capacity.
A speech from European Central Bank (ECB) President Christine Lagarde may influence the single currency today – if Lagarde maintains a hawkish tone, EUR could rise.
US Dollar (USD) Succumbs to Risk-On Downside
The US Dollar (USD) fluctuated through Thursday’s European session as a risk-on market mood sapped safe-haven support.
Also denting USD prospects was worse-than-expected US trade data – the country’s deficit reduced by less than forecast in May, printing at $-85.5bn rather than $-84.9bn. Moreover, initial jobless claims increased last week versus the week previous.
Today’s jobs report will likely affect ‘Greenback’ exchange rates. June’s non-farm payrolls are expected to have increased, albeit less than in May, and the unemployment rate is forecast to remain at 3.6% – potentially dampening USD sentiment.
Canadian Dollar (CAD) Wavers as Ivey PMI Misses Forecast
The Canadian Dollar (CAD) traded in a mixed range yesterday as the Ivey PMI fell to 62.2 in June from 72 in May.
Canada’s index revealed that economic activity in the country expanded at a slower pace than expected, causing concern given the Bank of Canada (BoC)’s aggressive rate hike outlook.
Employment data is expected to report 23.5K new hires in June, potentially extending some support to the ‘Loonie’ – although this would fall below May’s figure of 39.8K.
Data Releases
Jul 8th 21:55 EUR ECB Lagarde Speech N/A
Jul 8th 22:30 CAD Unemployment Rate (Jun) 5.1%
Jul 8th 22:30 CAD Employment Change (Jun) 23.5K
Jul 8th 22:30 USD Nonfarm Payrolls (Jun) 268K
Jul 8th 22:30 USD Unemployment Rate (Jun) 3.6%
Jul 9th 01:00 USD Fed Williams Speech N/A