Australian Dollar (AUD) Slips as Officials Warn of Lunar New Year Covid Surge for China
The Australian Dollar (AUD) came under pressure on Monday, shedding earlier gains, as the prospect of a Covid surge in China weighed on AUD.
Rising bets on further interest rate hikes from the Reserve Bank of Australia (RBA) lent support to the ‘Aussie’, however.
Looking ahead, a drop in the Westpac consumer confidence index could weigh on AUD if today’s data prints as forecast. An expected slowdown in Chinese GDP could also hurt the ‘Aussie’.
New Zealand Dollar (NZD) Wavers amid Shifting Risk Sentiment
The New Zealand Dollar (NZD) initially benefitted from a risk-on mood on Monday.
However, market sentiment soured as European trade began, trimming NZD’s gains.
Amid a lack of New Zealand data, the ‘Kiwi’ is likely to continue to be affected by any shifts in risk appetite today.
Pound (GBP) Slips as UK Outlook Worsens
The Pound (GBP) edged lower on Monday amid a pullback in global risk appetite.
The UK economy’s gloomy outlook also kept pressure on Sterling.
The latest jobs data could inspire gains for the Pound today. Could rising wage growth and low unemployment prompt Bank of England (BoE) rate hike bets?
Euro’s (EUR) Downturn Limited by ECB Rate Hike Bets
The Euro (EUR) ticked lower on Monday despite a pullback in risk appetite. EUR came under pressure from a resurgent US Dollar (USD), with which EUR is negatively correlated.
Bets on further interest rate hikes from the European Central Bank (ECB) prevented significant losses for the Euro, however.
Today Germany’s ZEW economic sentiment index for January is forecast to improve again, which could boost EUR exchange rates.
US Dollar (USD) Bolstered by Risk Appetite Retreat
The US Dollar regained lost ground on Monday. The safe-haven ‘Greenback’ found support from a cautious market mood and some dip-buying.
USD saw its gains limited by bets on a slower pace of policy tightening from the Federal Reserve.
With no data releases for the US Dollar today, USD is likely to be affected by market mood and Fed rate hike bets.
Canadian Dollar (CAD) Capped by Oil Price Slip
The Canadian Dollar (CAD) climbed on Monday. CAD was boosted by a stronger US Dollar, although an oil price pullback capped gains for the commodity-linked ‘Loonie’.
If December’s inflation slips as forecast today, it could pull CAD lower. The Canadian Dollar may also be affected by any shifts in oil prices.
Data Calendar
Jan 17th 09:30 AUD Westpac Consumer Confidence Index (Jan) 78.4
Jan 17th 17:00 EUR German Inflation Rate (Dec) 8.6%
Jan 17th 17:00 GBP Unemployment Rate 3.7%
Jan 17th 17:00 GBP Average Earnings incl. Bonus (Nov) 6.2%
Jan 17th 20:00 EUR German ZEW Economic Sentiment Index (Jan) -15
Jan 17th 23:30 CAD Inflation Rate (Dec) 6.4%