Australian Dollar (AUD) Falls as China Sees Worst Year for Growth since 1976
The Australian Dollar (AUD) fell yesterday. Downbeat Chinese GDP data pulled AUD lower, as fourth-quarter figures indicated that 2022 was the worst year for growth since 1976.
The data weighed on the ‘Aussie’, which often trades as a proxy for the Chinese economy. In addition, the subsequent downbeat market mood hurt the risk-sensitive currency.
With no significant data today, the Australian Dollar could see movement from any shifts in risk appetite.
New Zealand Dollar (NZD) Gains amid Increased RBNZ Rate Hike Bets
The New Zealand Dollar (NZD) climbed yesterday, shrugging off the downbeat market mood.
The ‘Kiwi’ was pushed higher by increased bets on further interest rate hikes from the Reserve Bank of New Zealand (RBNZ).
NZD will see no major data releases today. As a result, risk sentiment could drive most movement in the ‘Kiwi.
Pound (GBP) Bolstered as Jobs Figures Prompt BoE Rate Hike Bets
The Pound (GBP) was lifted by the UK’s latest jobs data on Tuesday. Above-forecast wage growth boosted bets on further interest rate hikes from the Bank of England (BoE).
Additionally, November’s unemployment rate remained unchanged at 3.7%. Markets took this as an indicator of a persistently tight labour market.
Looking ahead, a forecast slip in December’s inflation could weigh on Sterling today. Losses for GBP could be limited if inflation remains in double digits, however.
Euro (EUR) Climbs as German Economic Sentiment Returns to Positive Territory
The Euro (EUR) firmed against its peers on Tuesday. EUR was underpinned by the first positive reading of Germany’s ZEW economic sentiment index since Russia invaded Ukraine in February 2022.
Hawkish comments from European Central Bank (ECB) Chief Economist Philip Lane also helped EUR to climb. A confirmed slowdown in German inflation capped gains for EUR, however.
The final reading of the Eurozone’s December inflation could pull the Euro lower if the figures show a sharp deceleration as forecast.
US Dollar (USD) Falls as Manufacturing Sector Slumps
The US Dollar (USD) slipped yesterday as US Treasury yields declined. USD saw further losses after a sharp drop in the New York Fed Empire State manufacturing index. The data sparked fresh fears of a US recession.
The safe-haven ‘Greenback’ saw any significant losses limited by a risk-off market mood, however.
Looking ahead, a slump in PPI and retail sales could weigh on the US Dollar if the figures print as forecast.
Canadian Dollar (CAD) Falls after Above-Forecast Inflation Slip
The Canadian Dollar (CAD) weakened on Tuesday after a larger-than-forecast cooldown in December’s inflation. Drastic losses for the crude-linked ‘Loonie’ were limited by rising oil prices.
Looking to today, a forecast fall in December’s PPI could add to CAD’s downturn.
Data Calendar
Jan 18th 17:00 GBP Inflation Rate (Dec) 10.5%
Jan 18th 20:00 EUR Inflation Rate Final (Dec) 9.2%
Jan 18th 23:30 CAD PPI (Dec) -0.3%
Jan 18th 23:30 USD PPI (Dec) -0.1%
Jan 18th 23:30 USD Retail Sales (Dec) -0.8%