Australian Dollar (AUD) Trades Marginally Higher despite Risk Aversion
The Australian Dollar (AUD) rose against several peers at the end of last week, despite widespread risk-off sentiment.
Recession fears weighed upon risk sensitive currencies such as the ‘Aussie’ alongside ongoing geopolitical headwinds. Furthermore, dovish rhetoric from the Reserve Bank of Australia (RBA) continued to pressure AUD.
Today, a lack of significant data leaves the Australian Dollar to trade on external factors. If the market mood improves, AUD could climb.
New Zealand Dollar (NZD) Sinks as Commodities Weaken
The New Zealand Dollar (NZD) also succumbed to risk-off headwinds on Friday, as a lack of significant data exposed the currency to losses.
Also denting NZD sentiment was a fall in commodity prices, as dairy and beef – two of New Zealand’s main exports – dropped in value.
A further lack of domestic data may extend ‘Kiwi’ losses today, unless market sentiment recovers.
Pound (GBP) Tumbles on Downbeat Forecasts
The Pound (GBP) plunged at the end of last week, subdued by industrial action and consequent disruption in various sectors of the economy.
This offset the publication of the UK’s latest retail sales, despite July’s figures reporting a surprise rebound in sales growth.
Today, a quiet data calendar may see political developments and economic uncertainty continue to drive movement in the Pound.
Euro (EUR) Wavers as German Data Exceeds Forecasts
The Euro (EUR) rose against several peers on Friday despite risk-off sentiment and geopolitical headwinds.
Producer price inflation in Germany rose by 37.2% in the year to July, inspiring some hope that the European Central Bank (ECB) may begin to hike interest rates more aggressively – however, it also compounded fears of an economic recession, as Germany’s economy stalled in Q2 2022.
Investors may also have taken into account the fall in ZEW’s economic sentiment index, which printed below forecasts in August.
US Dollar (USD) trading might influence the single currency today, given a lack of data from the Eurozone.
US Dollar (USD) Buoyed by Hawkish Fed Comments
The US Dollar firmed at the end of the week as risk aversion drew support toward the safe-haven currency.
Also bolstering the ‘Greenback’ was further hawkish rhetoric from the Federal Reserve, following Thursday’s bold comments from policymaker Mary Daly. On Friday, Richmond Fed President Thomas Barkin reiterated that the central bank would do what it took to control inflation.
Today, USD exchange rates may be influenced by the Chicago Fed’s national activity index for July. The index is expected to climb, though remaining in negative territory.
Canadian Dollar (CAD) Trades Broadly Higher as Retail Sales Impress
The Canadian Dollar (CAD) climbed against the majority of its peers on Friday, supported by a better-than-expected retail sales release.
Sales grew by 1.1% in June, rather than the 0.3% forecast, having risen in 8 of the 11 relevant subsectors and driven by a higher turnover at gasoline stations.
Data Releases
Aug 22nd 22:30 USD Chicago Fed National Activity Index (Jul) -0.02