Australian Dollar (AUD) Drops on Dovish Meeting Minutes
The Australian Dollar (AUD) fell on Tuesday following the release of the latest meeting minutes from the Reserve Bank of Australia (RBA).
The minutes were broadly dovish in tone, dragging on AUD exchange rates as policymakers commented that the path ahead is narrow and subject to considerable uncertainty.
Today, the ‘Aussie’ may trade on risk sentiment given a lack of significant domestic data. If market mood improves, AUD could climb.
New Zealand Dollar (NZD) Weakens on Risk-Off Mood
The New Zealand Dollar (NZD) fell against its peers yesterday as risk-off trading sentiment dampened support for the currency.
NZD investors also appeared cautious of placing bullish bets ahead of the Reserve Bank of New Zealand (RBNZ)’s interest rate decision today.
If the RBNZ hikes interest rates by 50bps as expected, NZD exchange rates may rise.
Pound (GBP) Trends Broadly Higher on Rise in UK Regular Pay
The Pound (GBP) found some support on Tuesday as the UK’s latest jobs report revealed that regular pay increased in June, boosting expectations for another 50bps rate hike from the Bank of England (BoE).
Gains were capped, however, as monthly unemployment stalled and the economy added fewer jobs than expected. Economists calculated that adjusted for inflation, real wages fell by 3% – leaving many people worse off at a time when further price rises are forecast.
Today, UK inflation data is likely to influence Sterling. If the headline reading prints at 9.8% as expected, the BoE) will likely come under pressure to tighten monetary policy more aggressively.
Euro (EUR) Mixed on Weak EU Data
The Euro (EUR) traded in a mixed range against its peers yesterday, subdued by a disappointing balance of trade and German economic sentiment.
The trade deficit in the Euro area reduced, but by less than expected – from €-26.3bn in May to €-24.6bn in June. Meanwhile, Germany’s ZEW sentiment index for August fell to -55.3 rather than remaining unchanged.
Eurozone employment data is likely to drive EUR movement today: hiring in the bloc is expected to have slowed, potentially denting the single currency.
US Dollar (USD) Wobbles on Mixed Industrial Production Figures
The US Dollar (USD) lost ground against several peers on Tuesday, as the country’s industrial production data printed mixed.
While initially the ‘Greenback’ climbed on widespread risk aversion, it surrendered some of its early gains as industrial production for the year to July rose by less than expected. On a monthly basis, however, industrial production exceeded forecasts, rising by 0.6%.
Today, retail data may influence USD trading, possibly denting the currency if sales growth slowed in July as predicted. Tomorrow’s minutes from the Federal Open Market Committee (FOMC) could also weaken the US Dollar due to dovish rhetoric .
Canadian Dollar (CAD) Firms Overall as Inflation Meets Forecast
The Canadian Dollar (CAD) rose against the majority of its peers yesterday, despite a downturn in oil prices.
The ‘Loonie’ was buoyed as headline inflation met expectations; core inflation fell by 0.1% in the year to July.
Data Releases
Aug 17th 12:00 NZD RBNZ Interest Rate Decision 3%
Aug 17th 16:00 GBP Inflation Rate (Jul) 9.8%
Aug 17th 19:00 EUR Employment Change Prel (Q2) 0.4%
Aug 17th 19:00 EUR GDP Growth Rate 2nd est (Q2) 0.7%
Aug 17th 22:30 USD Retail Sales (Jul) 0.1%
Aug 17th 23:30 USD Fed Bowman Speech N/A
Aug 17th 04:00 USD FOMC Minutes N/A