Australian Dollar (AUD) Slips as Iron Prices Lose Ground
The risk-sensitive Australian Dollar (AUD) initially trended higher on Monday amid an upbeat market mood.
However, a later drop in iron ore prices pulled the commodity-linked currency lower.
The Australian Dollar could witness volatility today as markets continue to adjust to the Federal Reserve’s interest rate decision. Risk appetite could also impact the ‘Aussie’, with an upbeat mood potentially lending AUD some support.
New Zealand Dollar (NZD) Boosted by Risk Appetite Return
A cheery market mood bolstered the risk-sensitive New Zealand Dollar (NZD) yesterday. A weaker US Dollar (USD) also prompted gains for the ‘Kiwi’.
As the session progressed, however, NZD saw its gains capped as markets grew cautious ahead of the Fed decision.
The aftermath from the Fed meeting could continue to impact NZD today, potentially causing some turbulence.
Pound (GBP) Gains after Above-Forecast Inflation Data
The Pound (GBP) gained ground on Monday as markets refreshed bets on a 25bps rate hike from the Bank of England (BoE) following hotter-than-expected February inflation figures.
Later in the European session, Sterling relinquished these gains as pre-Fed jitters troubled GBP investors.
Tonight, the BoE is widely expected to hike interest rates by 25bps. If the central bank signals a slowdown in policy tightening at future meetings, it could see the Pound tumble.
Euro (EUR) Firms after Hawkish Comments from ECB’s Lagarde
Hawkish remarks from European Central Bank (ECB) policymakers boosted the Euro (EUR) yesterday.
ECB President Christine Lagarde signalled that underlying Eurozone inflation was still high and that further hikes may be necessary, while her colleague Joachim Nagel also signalled more rate rises to come.
Looking ahead, the Euro may be pushed higher by the latest Eurozone consumer confidence figures, due out overnight. Whilst the data is expected to remain in negative territory, March’s forecast reading would be the highest since February 2022.
US Dollar (USD) Subdued Ahead of Fed Meeting
The US Dollar (USD) slipped initially yesterday as markets awaited the Fed’s meeting.
A risk-on mood and jitters in the US banking sector also kept pressure on the safe-haven ‘Greenback’.
Today, USD investors could continue to respond to the Fed decision. The latest jobless claims figures could also inspire USD movement. If claims remain low, the ‘Greenback’ may find support.
Canadian Dollar (CAD) Ticks Lower as Crude Oil Prices Slide
A downturn in oil prices saw the commodity-tied Canadian Dollar (CAD) edge lower yesterday. The release of the Bank of Canada’s (BoC) latest meeting minutes also prompted movement in the ‘Loonie’.
If oil prices continue to slip today then CAD could see additional losses.
Data Calendar
Mar 23rd 22:00 GBP BoE Interest Rate Decision 4.25%
Mar 23rd 22:30 USD Initial Jobless Claims (18/Mar) 193,000
Mar 24th 01:00 EUR Consumer Confidence (Mar) -18.3