Australian Dollar’s (AUD) Losses Limited by RBA Rate Bets
A cautious market mood weighed on the risk-sensitive Australian Dollar (AUD) yesterday. A drop in iron ore prices also kept pressure on the ‘Aussie’.
AUD saw its losses cushioned by bets on additional interest rate hikes from the Reserve Bank of Australia (RBA), however.
If the market mood remains risk-off then the Australian Dollar could fall further today.
New Zealand Dollar (NZD) Wobbles as Risk Appetite Retreats
The risk-sensitive New Zealand Dollar (NZD) slid lower on Monday. A pullback in risk appetite saw the ‘Kiwi’ decline over the course of the day.
A downbeat mood in the commodity markets also caused NZD to lose ground.
The ‘Kiwi’ could struggle to recoup its losses today if the mood in the markets stays downbeat.
Pound (GBP) Ticks Lower despite BoE Bets
A lack of data left the Pound (GBP) vulnerable to the market mood on Monday. A weaker risk tone saw GBP decline against its safer peers.
Speculation that the Bank of England (BoE) will press ahead with a 25bps hike in May prevented a more drastic descent for Sterling.
Data from the Confederation of British Industry (CBI) could have a mixed impact on GBP today. An uptick in factory orders could lend support to Sterling, whereas a slump in second-quarter business confidence could pressure the Pound.
Euro (EUR) Climbs as ECB Rate Setters Hint at Further Hikes
The Euro (EUR) was bolstered by hawkish comments from European Central Bank (ECB) policymakers on Monday.
Speaking to the Financial Times, ECB rate setter Pierre Wunsch signalled that inflationary pressures needed to come down before the central bank would stop raising interest rates.
Further ECB rate hike bets could inspire gains in the Euro today. Additionally, persistent risk-off flows could keep EUR buoyed.
US Dollar (USD) Suffers amid Bond Yield Downturn
A drop in US Treasury bond yields kept the US Dollar (USD) under selling pressure on Monday. Evidence of a slowdown in the US manufacturing sector also weighed on USD.
The safe-haven ‘Greenback’ was supported by risk-off flows, however. Speculation that the Federal Reserve will push ahead with additional rate hikes also limited USD’s losses.
If April’s consumer confidence declines as forecast tonight then the US Dollar could see additional losses.
Canadian Dollar (CAD) Drops despite Firmer Oil Prices
The commodity-linked Canadian Dollar (CAD) dipped on Monday, despite an uptick in oil prices. CAD’s positive correlation with USD dragged the currency lower.
Amid a lack of Canadian data today, the ‘Loonie’ may be subdued again.
Apr 25th 20:00 GBP CBI Industrial Trends Orders (Apr) -20
Apr 25th 20:00 GBP CBI Business Optimism Index (Q2) -15
Apr 26th 00:00 USD CB Consumer Confidence (Apr) 104