Australian Dollar (AUD) Climbs despite Risk-Off Headwinds
The Australian Dollar (AUD) found support on Tuesday in spite of downbeat market sentiment, as commodity prices rose.
Coal prices rose thanks to increased demand from India. Thermal coal imports climbed to 19.22m tonnes in June, up 35% from May and 56% year-on-year.
Today, the ‘Aussie’ may trade on risk sentiment and other external factors, given a lack of Australian data.
New Zealand Dollar (NZD) Firms Ahead of RBNZ Decision
The New Zealand Dollar (NZD) also enjoyed tailwinds yesterday, ahead of an anticipated 50bps interest rate hike from the Reserve Bank of New Zealand (RBNZ).
ING analysts forecast a dovish shift in the mid-term, given a deteriorating economic outlook in New Zealand and signs of a contracting housing market; but for the meantime, forward-looking rhetoric is expected to be broadly hawkish potentially buoying NZD demand.
Pound (GBP) Sentiment Suppressed by Domestic Headwinds
The Pound (GBP) weakened against its peers on Tuesday as recession fears, political headwinds and disappointing retail data pressured the currency.
Bank of England (BoE) Governor Andrew Bailey reiterated on Monday the risks facing the UK economy while political uncertainty also remains a key concerns for GBP investors.
Today, GDP data may also act as a headwind for Sterling as the UK economy is expected to have stalled in May.
Euro (EUR) Dented by Weak Economic Sentiment
The Euro (EUR) tumbled against several peers yesterday as the Euro area’s ZEW economic sentiment index printed at -53.8 for July.
This marked the lowest reading since December 2011, as morale weakened over the bloc’s economic outlook.
Germany’s finalised consumer price index is expected to confirm inflation slowed in June – a greater-than-expected drop may subdue the single currency.
US Dollar (USD) Attracts Safe-Haven Support
The US Dollar (USD) strengthened on Tuesday as a downbeat market mood drew support toward the safe-haven currency.
However these gains were tempered overnight as a pullback in US Treasury yields limited USD demand.
Today, the US consumer price index is expected to report another acceleration of inflation in June, supporting an aggressive policy tightening stance from the Federal Reserve potentially bolstering the US Dollar.
Canadian Dollar (CAD) Trends Lower on Crude Price Drop
The Canadian Dollar (CAD) slumped yesterday as WTI crude prices slumped. The Organisation of Petroleum Exporting Countries (OPEC) left its world oil demand forecast unchanged, with risks skewed to the downside, weakening the ‘Loonie’s outlook as the currency is closely linked to oil price dynamics.
The Bank of Canada (BoC)’s interest rate decision may boost CAD tomorrow, however, as the central bank is expected to enact a hawkish rate hike of 75bps.
Data Releases
Jul 13th 12:00 NZD RBNZ Interest Rate Decision 2.5%
Jul 13th 16:00 EUR German Inflation Rate Final (Jun) 7.6%
Jul 13th 16:00 GBP GDP (May) 0%
Jul 13th 16:00 GBP Industrial Production (May) 0%
Jul 13th 19:00 EUR Industrial Production (May) 0.3%
Jul 13th 22:30 USD Inflation Rate (Jun) 8.8%
Jul 14th 00:00 CAD BoC Interest Rate Decision 2.25%