Australian Dollar (AUD) Nosedives as RBA Signals Rate Hike Pause
The Australian Dollar (AUD) plummeted on Tuesday following the Reserve Bank of Australia’s (RBA) dovish interest rate decision. The RBA signalled that a pause in rate hikes was on the horizon.
A narrowing in January’s trade surplus deepened losses for the risk-sensitive ‘Aussie’ yesterday.
A speech from RBA Governor Philip Lowe could pull AUD lower today if Lowe reaffirms the central bank’s dovish stance.
New Zealand Dollar (NZD) Pushed Higher by Risk-On Mood
A positive risk appetite initially bolstered the risk-sensitive New Zealand Dollar (NZD) on Tuesday.
NZD’s gains were capped by its positive correlation to the Australian Dollar, however, along with a souring market mood in the evening.
With no data releases today, movement in the ‘Kiwi’ is likely to be driven by any shifts in risk appetite.
Pound (GBP) Slips despite Hawkish BoE Comments
The Pound (GBP) edged lower yesterday after new UK sales data indicated challenges ahead for the British retail sector.
On the other hand, hawkish comments from Bank of England (BoE) policymaker Catherine Mann limited Sterling’s losses.
A lack of data could leave GBP at the mercy of domestic headlines today.
Euro (EUR) Recovers as Market Mood Sours
A return of global risk appetite saw the Euro (EUR) initially stumble on Tuesday. A drop in consumer inflation expectations also weighed on EUR.
However, better-than-forecast factory order figures for Germany lent support to EUR, while risk aversion in overnight trade helped the single currency recover.
Looking to today, any revisions to fourth-quarter Eurozone GDP growth could impact the Euro.
US Dollar (USD) Boosted by Hawkish Powell Testimony
A hawkish testimony from Federal Reserve Chair Jerome Powell saw the US Dollar (USD) leap in overnight trade.
Powell signalled that the Fed was open to increasing the pace of its future rate hikes, prompting bets on a 50bps hike later this month.
A second testimony from Powell today could have a similar effect on USD. Additionally, strong employment data could bolster the currency.
Canadian Dollar (CAD) Climbs despite Oil Price Drop
The Canadian Dollar (CAD) was ultimately pushed higher by a stronger US Dollar yesterday. A further drop in oil prices prevented any drastic gains for the commodity-linked ‘Loonie’, however.
Looking to today, the Bank of Canada’s (BoC) interest rate decision could push CAD lower if rates are left unchanged as forecast.
Data Calendar
Mar 8th 07:55 AUD RBA Gov Lowe Speech
Mar 8th 20:00 EUR GDP Growth Rate 3rd Est (Q4) 0%
Mar 8th 20:00 EUR ECB President Lagarde Speech
Mar 8th 23:15 USD ADP Employment Change (Feb) 200,000
Mar 9th 23:30 CAD Balance of Trade (Jan) CA$-0.06bn
Mar 9th 01:00 CAD BoC Interest Rate Decision 4.5%
Mar 9th 01:00 USD Fed Chair Powell Testimony
Mar 9th 01:00 USD JOLTs Job Openings 10.5m