Australian Dollar (AUD) Knocked by Weak Wage Growth
The Australian Dollar (AUD) slumped on Wednesday as AUD investors were left disappointed by the publication of Australia’s latest wage price index.
A surprising slowdown in wage growth in the fourth quarter indicates domestic inflation may not be as sticky as previously thought, weakening Reserve Bank of Australia (RBA) interest rate expectations.
AUD investors will look to speeches by a couple of RBA policymakers for fresh impetus today. A broadly dovish outlook could apply additional pressure to the ‘Aussie’.
New Zealand Dollar (NZD) Jumps on RBNZ Rate Hike
The New Zealand Dollar (NZD) enjoyed strong support through Wednesday’s trading session after the Reserve Bank of New Zealand (RBNZ) hiked interest rates by 50bps and signalled plans to continue raising them.
With NZD data thin on the ground, the ‘Kiwi’ may struggle to consolidate these gains if a risk-off mood prevails.
Pound (GBP) Wavers amid BoE Speculation and Brexit Uncertainty
The Pound (GBP) traded in a narrow range yesterday. GBP investors continued to be cheered by Bank of England (BoE) interest rate expectations.
However, Sterling struggled to advance amid fresh uncertainty over a supposed deal to solve the dispute between the UK and EU over the Northern Ireland protocol.
Looking ahead, a speech by BoE policymaker Catherine Mann has the potential to lift the Pound this evening. Mann is one of the bank’s more hawkish members so she may help to underpin BoE rate hike bets.
Euro (EUR) Sidelined by Weaker-than-Expected German Business Confidence
The Euro (EUR) traded sideways on Wednesday after Germany’s latest business climate index printed below forecast.
EUR sentiment was also suppressed by ongoing concerns over Russia’s next moves in Ukraine amid fears of an escalation of the conflict to coincide with the first anniversary of the war.
The publication of the Eurozone’s consumer price index is the only EUR data of note today. Will confirmation of a sharp drop in inflation last month limit the single currency’s upside potential?
US Dollar (USD) Firms in Cautious Trade
The US Dollar (USD) ticked higher yesterday as a cautious mood underpinned demand for the safe-haven ‘Greenback’.
However, these gains remained limited ahead of the publication of the minutes from the Federal Reserve’s February policy meeting.
Coming up later tonight is the release of the latest US GDP estimate. Barring a major revision, confirmation of a robust expansion of growth in the fourth quarter could extend some support to the US Dollar.
Canadian Dollar (CAD) Muted as Oil Prices Slump
The Canadian Dollar (CAD) was subdued on Wednesday as a drop in oil prices limited the appeal of the commodity-linked ‘Loonie’.
In the absence of any notable CAD data today, the Canadian Dollar is likely to continue to take its cues from oil price dynamics.
Data Releases
Feb 23rd 15:15 AUD RBA Bullock Speech
Feb 23rd 15:15 AUD RBA Cagliarini Speech
Feb 23rd 19:30 GBP BoE Mann Speech
Feb 23rd 20:00 EUR Inflation Rate (Jan) 8.6%
Feb 23rd 21:00 GBP CBI Distributive Trades (Feb) -13
Feb 23rd 23:30 USD GDP (Q4) 2.9%