Australian Dollar (AUD) Firms as Labour Market Remains Tight
A return of global risk appetite saw the risk-sensitive Australian Dollar (AUD) edge higher on Thursday. Still-high job vacancy figures also lent support to the ‘Aussie’.
However, AUD saw its gains curbed by continued bets on a slowdown in policy tightening from the Reserve Bank of Australia (RBA).
The Australian Dollar could continue to tick upward if markets remain risk-on today.
New Zealand Dollar (NZD) Lifted by Risk-On Mood
The New Zealand Dollar (NZD) was pushed higher by a risk-on market mood over the course of yesterday.
The risk-sensitive ‘Kiwi’ managed to shrug off poor business confidence figures for March.
NZD could be lifted by a forecast rise in March’s consumer confidence today.
Pound (GBP) Bolstered by Optimistic UK Forecasts
The Pound (GBP) climbed on Thursday, hitting multi-week highs against the US Dollar (USD). Sterling took strength from upbeat forecasts for UK private sector growth in the coming months.
Bets on additional interest rate hikes from the Bank of England (BoE) also supported GBP yesterday.
Sterling could consolidate its gains today if final GDP data indicates stagnant growth in the final quarter of 2022. The figures would confirm that the UK dodged a technical recession in 2022.
Euro (EUR) Gains despite German Inflation Fall
German inflation fell by less than expected on Thursday and provided a welcome boost to the Euro (EUR). The data raised expectations that the European Central Bank (ECB) may pursue more interest rate hikes.
Hawkish comments from ECB officials also saw EUR rally yesterday. The ECB’s economic bulletin hinted that Eurozone inflation is currently projected ‘to remain too high for too long’.
A forecast downturn in Eurozone inflation could dampen enthusiasm for EUR today. On the other hand, an expected uptick in core inflation could prompt increased ECB rate rise bets.
US Dollar (USD) Slumps as GDP Revised Lower
The safe-haven US Dollar stumbled on Thursday amid a return of risk appetite. A downward revision in the final reading of fourth-quarter GDP figures added to USD’s downturn.
The ‘Greenback’ came under additional pressure from bets on a softer rate hike pace from the Federal Reserve.
A forecast cooling of the core PCE price index, the Fed’s preferred measure of inflation, could pull USD lower today.
Weaker USD Weighs on Canadian Dollar (CAD)
A weaker US Dollar weighed on the Canadian Dollar (CAD) yesterday. However, the commodity-linked ‘Loonie’ was underpinned by rising crude oil prices.
CAD could recover some of its losses today if the country’s economy expands in January as forecast.
Data Calendar
Mar 31st 16:00 GBP GDP Growth Rate (Q4) 0%
Mar 31st 19:00 EUR Inflation Rate (Mar) 7.1%
Mar 31st 19:00 EUR Unemployment Rate (Feb) 6.7%
Mar 31st 22:30 CAD GDP (Jan) 0.3%
Mar 31st 22:30 USD Core PCE Price Index (Feb) 0.4%