Australian Dollar (AUD) Slides as Unrest in China Grows over Covid Restrictions
The Australian Dollar (AUD) tumbled yesterday amid a retreat in global risk appetite. An above-forecast slump in October’s retail sales also weighed on the ‘Aussie’.
AUD also suffered from a further rise in China’s Covid case levels and protests against the country’s strict ‘zero Covid’ measures.
With no significant data today, movement in the ‘Aussie’ is likely remain linked to risk appetite and any further unrest in China.
New Zealand Dollar (NZD) Slips amid Risk-Off Mood
The New Zealand Dollar (NZD) fell on Monday. A risk-off mood and the currency’s correlation to the Australian Dollar pulled the ‘Kiwi’ lower.
Looking ahead, the ‘Kiwi’ could face an uphill battle today if market risk appetite continues to deliberate.
Pound (GBP) Drops as Retail Sales Slump
The Pound (GBP) slipped against its rivals yesterday amid a cautious market mood. A worse-than-expected fall in November’s retail sales weighed on Sterling.
On the other hand, significant losses for the currency were limited by persistent bets on a 50bps interest rate hike from the Bank of England (BoE).
A speech from BoE policymaker Catherine Mann could push GBP higher if she is hawkish in her outlook for future monetary policy.
Euro (EUR) Pushed Higher by ECB Rate Hike Bets
The Euro (EUR) benefitted from a risk-off market mood and weakened US Dollar (USD) on Monday. Hawkish signals from European Central Bank (ECB) officials also bolstered EUR.
Bets on aggressive action from the ECB intensified after a speech from central bank President Christine Lagarde. The ECB’s president signalled that she was ‘committed to bringing inflation down’ despite the risks to Eurozone growth.
A expected slip in Germany inflation could weigh on the Euro later tonight, as this could temper ECB rate hike bets.
US Dollar (USD) Dips as Markets Pare Back Fed Bets
The US Dollar (USD) dropped on Monday despite a risk-off mood. A downturn in US bond yields weighed on the currency as investors sought more traditional safe-haven assets.
Bets on less aggressive interest rate hikes from the Federal Reserve also pulled USD lower. Markets continued to price in a 50bps rate hike from the Fed.
A drop in consumer confidence could pull USD lower today if figures print as forecast.
Canadian Dollar (CAD) Falls as Oil Prices Tumble
The Canadian Dollar (CAD) dropped on Monday. The commodity-tied ‘Loonie’ was pulled lower by a slump in crude oil prices.
The Canadian Dollar may extend these losses later tonight, if Canada’s latest GDP releases disappoint.