Australian Dollar’s (AUD) Gains Capped by Dovish RBA Signals
The risk-sensitive Australian Dollar (AUD) was bolstered by a return of global risk appetite yesterday. Signs of improving diplomatic ties between Australia and China also strengthened the ‘Aussie’.
On the other hand, a speech from Reserve Bank of Australia (RBA) Deputy Governor Michele Bullock kept pressure on AUD.
If today’s jobs data prints as forecast, it could dent AUD. March’s unemployment rate is expected to tick higher to 3.6%.
New Zealand Dollar (NZD) Boosted by Risk-On Mood
A risk-on mood lifted the risk-sensitive New Zealand Dollar (NZD) on Wednesday.
Dwindling expectations for more Federal Reserve interest rate hikes cheered markets, thereby lifting riskier currencies such as NZD.
With no significant data releases today, the ‘Kiwi’ could rise if risk appetite remains strong.
Pound (GBP) Drops despite BoE Bailey Comments
The Pound (GBP) slipped over the course of Wednesday, with worries about peace and political stability in Northern Ireland seemingly troubling GBP investors.
Signals from Bank of England (BoE) Governor Andrew Bailey that the central bank will pursue its path of policy tightening provided some support to GBP, however.
Sterling could recover lost ground today if GDP data prints as forecast. The UK economy is expected to have expanded by 0.1% in March.
Euro (EUR) Gains as ECB Policymakers Remain Hawkish
The Euro (EUR) firmed yesterday amid a weaker US Dollar (USD) following the release of high-impact inflation data.
Expectations of additional interest rate hikes from the European Central Bank (ECB) prompted additional gains for the Euro.
The final reading of Germany’s March inflation today could dent ECB bets if it confirms easing inflationary pressures. On the other hand, an above-forecast rise in Eurozone industrial output could keep EUR buoyed.
US Dollar (USD) Plunges after Cooler-than-Expected Inflation Data
Evidence of cooling inflation saw the US Dollar tumble to one-week lows on Wednesday. March’s inflation fell by more than forecast to 5%, which reinforced expectations of a Federal Reserve slowdown.
However, USD’s losses were cushioned by an uptick in March’s core inflation rate. The release of the Federal Open Market Committee’s (FOMC) latest meeting minutes inspired additional volatility in the currency.
The US Dollar could fall further tonight if March’s PPI remains unchanged as forecast. The data is likely to add to forecasts of a slower pace of policy tightening from the Fed.
Canadian Dollar (CAD) Drops as BoC Leaves Rates Unchanged
The Canadian Dollar (CAD) declined yesterday following the Bank of Canada’s (BoC) decision to leave interest rates unchanged. CAD also suffered due to its correlation to a weaker US Dollar.
CAD could see deeper losses today if a speech from BoC Governor Tiff Macklem gives any additional dovish hints.
Apr 13th 11:30 AUD Unemployment Rate (Mar) 3.6%
Apr 13th 16:00 EUR German Inflation Rate (Mar) 7.4%
Apr 13th 16:00 GBP GDP (Feb) 0.1%
Apr 13th 19:00 EUR Industrial Production (Feb) 1%
Apr 13th 22:30 USD PPI (Mar) 0%
Apr 13th 23:00 CAD BoC Gov Macklem Speech