Australian Dollar (AUD) Drops as Iron Ore Prices Tumble
A downturn in iron ore prices weighed on the resource-linked Australian Dollar (AUD) on Friday. The commodity touched three-month lows after an expected supply shortage failed to materialise.
However, the risk-sensitive ‘Aussie’ saw its losses cushioned by a return of global risk appetite.
AUD could see deeper losses today if commodity prices continue to slide. Any shifts in market sentiment could also affect the Australian Dollar.
New Zealand Dollar (NZD) Stumbles as Manufacturing Sector Struggles
The New Zealand Dollar (NZD) declined on Friday. The ‘Kiwi’ came under pressure following an unexpected contraction in March’s manufacturing PMI.
The risk-sensitive currency found some support from an upbeat market mood, however, which limited losses for NZD.
March’s services PMI could boost NZD today if it confirms a third consecutive month of growth.
Pound (GBP) Muted in Wake of Disappointing GDP
Lingering headwinds following the UK’s poor GDP data on Thursday kept the Pound (GBP) subdued at the end of the week.
A speech from notably dovish Bank of England (BoE) policymaker Silvana Tenreyro overnight added to the cautious outlook surrounding GBP.
The Pound could tick higher today if a speech from hawkish BoE board member Jon Cunliffe signals further rate hikes from the central bank.
Euro (EUR) Finds Support from ECB Bets
Persistent bets on a 50bps interest rate hike from the European Central Bank (ECB) boosted the Euro on Friday. Policymakers continued to signal further tightening.
On the other hand, rate hike bets were capped by some dovish comments from ECB President Christine Lagarde. A late rally in the US Dollar (USD) added to the pressure on EUR, due to the currencies’ negative correlation.
The Euro will see no significant data releases today, which may leave EUR exposed to losses.
US Dollar (USD) Rallies following Hawkish Fed Comments
The US Dollar (USD) recouped its losses on Friday. USD initially began the day on the back foot after cooler inflation data on Thursday. A larger-than-forecast fall in retail sales also dented confidence in the currency.
USD firmed later in the day following hawkish comments from Federal Reserve policymaker Christopher Waller, though. Waller argued that more rate hikes were needed, giving the US Dollar a shot in the arm.
Looking to today, an improvement in New York state manufacturing output could push USD higher.
Canadian Dollar (CAD) Firms Thanks to USD Correlation
The Canadian Dollar (CAD) strengthened at the end of last week’s trade, with CAD buoyed by its positive correlation to a rallying US Dollar.
Turning to today, Canadian data is thin on the ground. As a result, USD movements may continue driving CAD exchange rates.
Apr 17th 08:30 NZD Services NZ PSI 53.6
Apr 17th 22:30 USD NY Empire State Manufacturing Index (Apr) -15
Apr 17th 23:00 GBP BoE Cunliffe Speech