Australian Dollar (AUD) Bolstered by China-Based Optimism
The Australian Dollar (AUD) strengthened on Monday as optimism over the easing of China’s ban on Australian coal, as well as an uptick in iron ore prices, boosted AUD.
China’s soaring Covid-19 case levels capped gains for the Australian Dollar, however. A slump in Australia’s housing market also limited AUD’s upside.
The Australian Dollar will see no data releases today. As a result, the ‘Aussie’ could be affected by any shifts in risk appetite and news out of China.
New Zealand Dollar (NZD) Undermined as ‘Kraken’ Covid Variant Detected
After initially gaining ground amid a risk-on mood, the New Zealand Dollar (NZD) then fell on Monday.
The ‘Kiwi’ dropped amid reports that the ‘Kraken’ Covid-19 subvariant had been detected in New Zealand.
News regarding Covid infection rates and risk appetite are set to drive movement in NZD today.
Pound (GBP) Boosted by BoE Rate Hike Bets
The Pound (GBP) was mixed on Monday. Sterling found support from forecasts that the Bank of England (BoE) would push ahead with more interest rate hikes at its upcoming meetings.
On the other hand, a lack of progress in talks between union leaders and the UK government weighed on the Pound. Investors had hoped that the meetings could resolve long-running disputes over pay.
Retail sales figures for December could bolster Sterling today if they show growth, as forecast. The impact could be limited however, with the figures expected to slow from the previous month’s.
Euro (EUR) Climbs as Unemployment Remains at Record Low
The Euro (EUR) climbed against most of its peers on Monday, boosted by the Eurozone’s record-low unemployment rate.
A risk-on mood kept EUR’s gains limited elsewhere, however. Developments in the Russia-Ukraine conflict also kept pressure on the Euro.
With no Eurozone data due out today, news about the Russia-Ukraine war could drive most movement in EUR.
US Dollar (USD) Drops as Markets Price in Smaller Fed Rate Hikes
The US Dollar (USD) slipped yesterday. The safe-haven ‘Greenback’ struggled after a recovery in global risk appetite and a downturn in US Treasury bond yields.
Expectations of a slower pace of policy tightening from the Federal Reserve also weighed on the US Dollar on Monday.
A speech by Fed Chair Jerome Powell at midnight could prompt movement in USD if he gives any hints regarding the central bank’s forward path.
Canadian Dollar (CAD) Slips despite Oil Price Rebound
The Canadian Dollar (CAD) was dragged lower on Monday by a weaker US Dollar. A rebound in crude oil prices lent support to the ‘Loonie’, however, limiting losses.
CAD will see no significant data today. Therefore, the currency is likely to be affected by oil price shifts and its correlation to the US Dollar.
Data Calendar
Jan 10th 10:01 GBP BRC Retail Sales Monitor (Dec) 2.4%
Jan 11th 00:00 USD Fed Chair Powell Speech