Australian Dollar (AUD) Boosted by Upbeat Data Releases
The Australian Dollar (AUD) climbed yesterday, boosted by a rise in November’s inflation rate after the CPI ticked higher to 7.3%.
Stronger-than-expected growth in Australia’s retail sales also helped the ‘Aussie’ to make gains on Wednesday.
Looking ahead, a narrowing in the country’s trade surplus could weigh on the ‘Aussie’ if today’s data prints as forecast.
New Zealand Dollar (NZD) Pulled Lower by Risk-Off Mood
The New Zealand Dollar (NZD) fell on Wednesday as the ‘Kiwi’ was pulled lower by a retreat in risk appetite.
With no data releases for NZD today, the ‘Kiwi’ will likely be affected by any shifts in risk sentiment. Could a fall in US inflation tonight spark a risk-on rally?
Pound (GBP) Drops as Strikes Set to Continue
The Pound (GBP) dipped on Wednesday. Further evidence of a downturn in the UK housing sector weighed on Sterling, as did ongoing strike action among public sector workers.
Market expectations of a slower pace of policy tightening from the Bank of England (BoE) also dented confidence in the Pound yesterday.
The Pound will see no data releases today. The prospect of further strike action could keep pressure on GBP.
Euro (EUR) Climbs as ECB Policymakers Signal Further Rate Hikes
The Euro (EUR) was pushed higher by hawkish comments from European Central Bank (ECB) officials on Wednesday.
Speaking in front of the French senate, ECB policymaker Francois Villeroy de Galhau signalled that the central bank would push ahead with further rate hikes at a ‘pragmatic pace’. His colleague Olli Rehn echoed this sentiment by saying ‘[p]olicy rates will still have to rise significantly’.
The Euro will see no data releases today. The safe-haven single currency could be affected by shifts in risk appetite, as well as any further developments in the Russia-Ukraine war.
US Dollar (USD) Gains Capped by Bets on Softer Fed Action
The US Dollar (USD) rose on Wednesday. A cautious market mood bolstered the safe-haven ‘Greenback’, as did some dip-buying.
Gains for USD were capped by a continued pullback in bets on hawkish action from the Federal Reserve. Markets now anticipate a softer stance from the Fed.
Looking ahead, the US Dollar could slip today if inflation in December cools as forecast. Economists expect another sharp slowdown in the US CPI, which would likely see traders further rein in rate hike bets.
Canadian Dollar (CAD) Bolstered by Steady Oil Prices
The Canadian Dollar (CAD) was boosted by rising oil prices on Wednesday. A stronger US Dollar also lent support to CAD.
With no data releases today, the Canadian Dollar is likely to be affected by any shifts in oil prices.
Data Calendar
Jan 12th 10:30 AUD Balance of Trade (Nov) AU$10.5bn
Jan 12th 23:30 USD Inflation Rate (Dec) 6.5%
Jan 12th 23:30 USD Initial Jobless Claims (Jan/07) 215,000