Australian Dollar (AUD) Strengthened by Falling Unemployment
The Australian Dollar (AUD) rose against most of its peers during Thursday’s Asian trading session after domestic unemployment was reported to have fallen to a new record low in June.
However, the ‘Aussie’ later relinquished the majority of these gains amid a prevailing risk-off mood.
Today, Chinese data may influence AUD given the ‘Aussie’s role as a proxy for China’s economy. If Chinese GDP rises as forecast, the Australian Dollar could firm.
New Zealand Dollar (NZD) Trades Mixed Ahead of Business PMI
The New Zealand Dollar (NZD) traded in a mixed range yesterday on a lack of significant NZ data.
On the whole, the ‘Kiwi’s downward trajectory levelled somewhat, having plunged following the Reserve Bank of New Zealand (RBNZ)’s interest rate decision. Although the bank’s statement was downbeat, the RBNZ said it sees the path outlined in May as still being appropriate.
New Zealand’s June business PMI could influence trading today – if it reports an increase in productivity, the ‘Kiwi’ may climb.
Pound (GBP) Subdued as IMF Gives Dire Forecast
The Pound (GBP) wavered on Thursday as widespread risk aversion dented GBP appeal against safe-haven currencies while buoying it against perceived-riskier peers.
Contributing toward a risk-off mood was a report by the International Monetary Fund (IMF) which assessed that the outlook for the global economy has ‘darkened significantly’ in recent months as living costs soar and fears of a recession escalate.
Today, a lack of significant UK data exposes Sterling to risk-off downside once again; any further political developments may also affect Pound trading.
Euro (EUR) Faces Headwinds as EU Cuts Growth Forecasts
The Euro (EUR) struggled to make gains across the board yesterday as the European Commission cut its growth forecasts for the Euro area and hiked its inflation outlook.
The EC warned that shocks unleashed by the war in Ukraine are weakening the EU economy alongside deceleration of growth in the US and China’s strict zero-Covid policy. Growth for 2023 is now estimated to slow to 1.4% from the 2.3% previously forecast.
The Euro area’s trade balance may have some effect on EUR exchange rates today, although this could be overshadowed by US Dollar (USD) dynamics given the currencies’ strong negative correlation.
US Dollar (USD) Surges amid 100bps Fed Rate Hike Expectations
The US Dollar (USD) continued to rally on Thursday, with expectations the Federal Reserve may raise interest rates by 100bps points later this month, underpinning the currency.
Also buoying USD exchange rates was they latest US PPI figures as prices climbed 11.3% in June, reinforcing the high inflation narrative in line with Wednesday’s CPI data.
Today, retail data could affect the ‘Greenback’ alongside July’s preliminary consumer sentiment reading. Sales are expected to have risen in June, although investors may brace for a fall as recent data has defied expectations.
Canadian Dollar (CAD) Drops on Crude Dynamics
The Canadian Dollar (CAD) sank against its peers yesterday as the price of WTI crude oil slumped.
Tailwinds following the Bank of Canada (BoC)’s surprise 100bps interest rate hike were unable to buoy the ‘Loonie’ as commodity prices consistently undermine CAD strength.
Data Releases
Jul 15th 08:30 NZD Business NZ PMI (Jun) 54.0
Jul 15th 19:00 EUR Balance of Trade (May) €-31.7bn
Jul 15th 22:30 USD Retail Sales (Jun) 0.8%
Jul 15th 22:30 USD NY Empire State Manufacturing Index (Jul) -2
Jul 15th 22:45 USD Fed Bostic Speech N/A
Jul 15th 23:15 USD Industrial Production (Jun) 0.1%
Jul 16th 00:00 USD Michigan Consumer sentiment Prelim (Jun) 49.9