Australian Dollar (AUD) Climbs amid Optimism for Chinese Economy
The risk-sensitive Australian Dollar (AUD) was bolstered by a return of risk appetite on Thursday.
Additionally, optimism around China’s economic recovery lent support to the ‘Aussie’, as AUD often trades as a proxy for the Chinese economy.
The Reserve Bank of Australia’s (RBA) latest monetary policy statement may push the ‘Aussie’ higher today. Investors will be looking for hints of further policy tightening from the central bank.
New Zealand Dollar (NZD) Bolstered by Risk-On Mood
An upbeat market mood prompted strong gains for the New Zealand Dollar (NZD) on Thursday.
The ‘Kiwi’ also benefitted from a weaker US Dollar (USD) amid a pullback in US Federal Reserve rate hike bets.
Turning to today, an improvement in New Zealand’s business PMI could aid NZD. However, with private sector activity expected to remain in contractionary territory, any gains could be limited.
Pound’s (GBP) Gains Capped by Signs of BoE Policy Split
The Pound (GBP) rose amid a risk-on market mood yesterday, with GBP investors also seemingly upbeat ahead of the UK’s GDP data today.
Comments from Bank of England (BoE) Governor Andrew Bailey and other policymakers capped gains for Sterling, however. Testifying before the UK’s Treasury Committee, the remarks pointed to a split amongst policymakers regarding future interest rate decisions.
Today’s UK GDP data will reveal whether or not the country fell into a recession at the end of last year. If the UK avoided a recession, Sterling could extend its upside.
Euro (EUR) Softens as German Inflation Cools
The Euro (EUR) slipped yesterday. An unexpected cooldown in Germany’s harmonised inflation rate for January dented European Central Bank (ECB) interest rate rise expectations.
The single currency did attract some support, however, thanks to its negative correlation with a weakening US Dollar. This cushioned EUR’s losses.
With no significant data releases today, the Euro could be affected by shifts in risk appetite and rate hike bets.
US Dollar (USD) Tumbles as Markets Pare Back Fed Bets
Thursday saw some deep losses for the safe-haven US Dollar (USD) amid an upbeat market mood. A paring back of bets on further action from the Fed also weighed on USD.
The latest jobless claims propped up the US Dollar, however. Claims remained close to historic lows, pointing to a tight labour market.
Looking ahead, a forecast uptick in February’s consumer sentiment reading could lend some support to USD.
Canadian Dollar (CAD) Slumps as Oil Prices Slide
A drop in oil prices pulled the Canadian Dollar (CAD) lower yesterday. A weak US Dollar also weighed on CAD, due to the currencies’ positive correlation.
Looking to today, January’s unemployment figures could dent CAD if they climb as forecast. Additionally, volatility in the price of oil could provoke movement in the ‘Loonie’.
Data Releases
Feb 10th 07:30 NZD Business NZ PMI (Jan) 48.4
Feb 10th 10:30 AUD RBA Statement on Monetary Policy
Feb 10th 17:00 GBP GDP (Dec) -0.3%
Feb 10th 17:00 GBP GDP Growth Rate (Q4) 0%
Feb 10th 23:30 CAD Unemployment Rate (Jan) 5.1%
Feb 11th 01:00 USD Michigan Consumer Sentiment (Feb) 65