Australian Dollar (AUD) Firms as Risk Appetite Improves
The Australian Dollar (AUD) strengthened on Thursday as a bullish market mood buoyed risk-sensitive currencies against their safe-haven peers.
Despite a lack of domestic data, AUD was propelled higher by softer inflation in America, which lead to sustained drop in the US Dollar.
Today, a continued lack of data leaves the ‘Aussie’ to trade on external factors. Relations between Australia and China have been tense recently over the issue of Taiwanese sovereignty – any developments there could influence AUD exchange rates.
New Zealand Dollar (NZD) Trends Up on Upbeat Trading Sentiment
The New Zealand Dollar (NZD) likewise rose against its peers yesterday, supported by improving risk appetite.
Today, July’s NZ business PMI could cap further gains for NZD amid forecasts for another contraction in manufacturing sector growth last month.
Pound (GBP) Subdued on UK Price Pressures
The Pound (GBP) ticked lower against the majority of its peers on Thursday as cost-of-living headwinds sapped support for the currency.
A meeting between UK government representatives and big energy bosses failed to deliver a concrete solution to rocketing energy bills. Companies allegedly pledged to ‘do more to help the people who most need it’ but did not suggest what that might entail.
UK GDP data will be released today and is expected to report a contraction in economic growth in Q2. This is likely to stoke recession fears and could drag on the Pound.
Euro (EUR) Supported by USD Weakness
The Euro (EUR) trended up against its peers yesterday, bolstered by downtrend in the US Dollar.
Due to the currencies’ strong negative correlation, weakness in the ‘Greenback’ invariably supports EUR. Although the single currency’s gains remained capped amid ongoing gas shortage concerns.
Today, industrial production data could lend tailwinds to the Euro, if it increased in June as forecast. Although the predicted increase of 0.2% falls short of May’s 0.8% rise, it exceeds several recent months of contraction.
US Dollar (USD) Weakens on Mixed Domestic Data
The US Dollar (USD) sank on Thursday as investors faced further evidence of softer inflation. The producer price index for the year to July printed at 9.8% rather than the 10.4% expected.
While markets had been expecting a fall, the drop in PPI was greater than anticipated and prompted USD investors to further scale back their Federal Reserve rate hike expectations.
The University of Michigan’s preliminary consumer sentiment index could help to reverse the ‘Greenback’s’ downturn first thing tomorrow, if it improves from 51.5 as expected.
Canadian Dollar (CAD) Drops on Lower Demand Forecast
The Canadian Dollar (CAD) tumbled against several peers yesterday despite rising daily crude prices.
This occurred as the Organisation of Petroleum Exporting Countries (OPEC) cut its 2022 world oil demand growth forecast to 3.1 million barrels per day, from 3.36bpd previously.
Data Releases
Aug 12th 08:30 NZD Business NZ PMI (Jul) 49.2
Aug 12th 16:00 GBP GDP Growth Rate Prelim (Q2) -0.2%
Aug 12th 16:00 GBP Industrial Production (Jun) -1.3%
Aug 12th 19:00 EUR Industrial Production (Jun) 0.2%
Aug 13th 00:00 USD Michigan Consumer Sentiment Prelim (Aug) 52.5