Australian Dollar (AUD) Slips on Consumer Confidence Miss
The Australian Dollar (AUD) fell yesterday following a large and unexpected drop in Australian consumer confidence. The Westpac consumer confidence index declined from 84.3 to 78.5, rather than rising to 85.3 as was forecast.
An initially upbeat mood may have limited the risky Australian Dollar’s losses. However, the US inflation rate reading later on triggered volatility.
Turning to today’s trade, a speech from Reserve Bank of Australia (RBA) Governor Philip Lowe could impact AUD this morning. Any more hawkish hints from the central bank chief could lift the ‘Aussie’.
New Zealand Dollar (NZD) Falls as Inflation Expectations Decline
The New Zealand Dollar (NZD) also declined during yesterday’s trade following a surprise drop in business inflation expectations.
This in turn dampened the prospects of further policy tightening from the Reserve Bank of New Zealand (RBNZ), which weighed on NZD.
In the absence of any notable New Zealand data today, risk sentiment could continue to drive most movement in the ‘Kiwi’.
Pound (GBP) Firms following UK Jobs Data
The Pound (GBP) strengthened during yesterday’s European session after the UK’s latest employment report, including wage growth, raised expectations that the Bank of England (BoE) will continue raising interest rates.
However, a souring market mood later on saw Sterling slip against its safer rivals.
The latest UK consumer price index is the focus for GBP investors this afternoon. If inflation remains in double digits, further BoE rate rise bets could boost the Pound.
Euro (EUR) Supported by ECB Rate Hike Bets
The Euro (EUR) initially firmed yesterday thanks to a surprise uptick in German wholesale prices, which increased the likelihood of further aggressive policy action from the European Central Bank (ECB).
EUR experienced some volatility in the latter part of the European session due to its strong negative correlation with the US Dollar (USD).
Later this evening, economists are expecting some downbeat trade and industrial production data from the Eurozone. This could create headwinds for the common currency.
US Dollar (USD) Fluctuates as Inflation Exceeds Forecasts
The US Dollar faced selling pressure yesterday as an upbeat market mood dented the safe-haven currency.
However, US inflation printed higher than expected during American trade. Markets readjusted their Federal Reserve rate rise expectations, triggering volatility and helping USD recover some losses.
Tonight, an expected strong rebound in US retail sales could cause movement. Will a robust reading cheer markets, thereby denting USD, or could it further boost Fed rate rise bets?
Canadian Dollar (CAD) Slides as Oil Prices Soften
The crude-linked Canadian Dollar (CAD) weakened yesterday as falling oil prices put pressure on the ‘Loonie’.
Amid a continued lack of CAD data today, oil market movements may drive the Canadian Dollar’s direction.
Data Releases
Feb 15th 10:15 AUD RBA Gov Lowe Speech
Feb 15th 17:00 GBP Inflation Rate (Jan) 10.3%
Feb 15th 20:00 EUR Balance of Trade (Dec) €-12.5bn
Feb 15th 20:00 EUR Industrial Production (Dec) -0.8%
Feb 15th 23:30 USD Retail Sales (Jan) 1.8%
Feb 16th 00:00 EUR ECB President Lagarde Speech