Gains for Australian Dollar (AUD) Capped by Dovish RBA Pivot
The risk-sensitive Australian Dollar (AUD) benefitted from a return of global risk appetite on Wednesday. Rising coal and iron ore prices also lent support to the resource-linked currency.
The ‘Aussie’ continued to see its gains capped by the Reserve Bank of Australia’s (RBA) dovish pivot, however.
Looking to today, a lack of data could see AUD affected by any shifts in risk appetite.
New Zealand Dollar (NZD) Pushed Higher by Risk-On Mood
A risk-on mood pushed the New Zealand Dollar (NZD) higher yesterday, with markets recovering somewhat after widespread risk aversion on Wednesday morning.
However, the improvement in the market mood was limited as investors remained concerned about the prospect of higher US interest rates.
A lack of significant data today means that risk sentiment could continue to drive NZD exchange rates.
Pound (GBP) Pulled Lower by Dovish BoE Rhetoric
The Pound (GBP) trended lower over the course of Wednesday. The expectation of a slower pace of policy tightening from the Bank of England (BoE) weighed on Sterling.
Dovish comments from BoE policymaker Swati Dhingra added to this sentiment, as Dhingra advocated a pause at the next policy meeting.
Sterling could come under pressure today if markets continue to anticipate a slowdown from the British central bank.
Euro (EUR) Drops as Eurozone GDP Stagnates
Disappointing data releases kept the Euro (EUR) on the defensive yesterday. German retail sales fell by more than forecast. Additionally, Eurozone fourth-quarter GDP growth was revised lower to indicate that the bloc’s economy stagnated at the end of 2022.
Further hawkish comments from European Central Bank (ECB) President Christine Lagarde underpinned EUR, however, limiting losses.
Looking ahead, the Euro’s movements are likely to be dictated by ECB bets and Russia-Ukraine news today.
US Dollar (USD) Slips despite Strong Jobs
The US Dollar (USD) trimmed its recent gains yesterday as a slight recovery in the market mood dampened the safe-haven currency’s appeal.
Strong US jobs data failed to boost the ‘Greenback’. The ADP employment report and JOLTs job openings both exceeded forecasts, though USD investors paid little attention.
If jobless levels print close to previous lows today, USD could climb as evidence of a tight labour market may boost Federal Reserve rate rise bets.
Canadian Dollar (CAD) Slips as BoC Leaves Rates Unchanged
The commodity-linked Canadian Dollar (CAD) slipped yesterday after a downturn in oil prices. The Bank of Canada’s (BoC) decision to leave interest rates unchanged also weighed on the ‘Loonie’.
Any drastic changes in the price of crude oil could prompt movement in CAD today.
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Mar 10th 01:00 USD Fed Barr Speech