Australian Dollar (AUD) Slumps as Iron Ore Prices Nosedive
The risk-sensitive Australian Dollar (AUD) came under pressure from a pullback in global risk appetite on Tuesday.
A sharp downturn in iron ore prices also dented confidence in the commodity-linked ‘Aussie’ as demand amongst Chinese steelmakers plummeted.
AUD could continue its downturn today if first-quarter inflation cools to 6.9% as forecast. The figures could prompt a pullback in Reserve Bank of Australia (RBA) rate hike bets.
New Zealand Dollar (NZD) Ticks Higher despite Commodity Market Downturn
The risk-sensitive New Zealand Dollar (NZD) managed to edge higher yesterday, despite falling commodities prices and a downbeat market mood.
The ‘Kiwi’ may have been bolstered by an uptick in New Zealand government bond yields, potentially indicating expectations for more Reserve Bank of New Zealand (RBNZ) rate rises.
NZD could face a downside today if the country’s trade deficit remains close to previous readings.
Pound (GBP) Declines as Manufacturing Sector Struggles
The Pound (GBP) wobbled on Tuesday following downbeat data from the Confederation of British Industry (CBI) highlighting ongoing headwinds for UK manufacturers.
Conversely, Sterling saw more drastic losses prevented by better-than-forecast UK government borrowing figures.
The CBI’s distribute trades figures could weigh on the Pound this evening. The gauge of retail sector health is expected to indicate stagnation in April.
Euro (EUR) Slips despite Hawkish ECB Rhetoric
The Euro (EUR) saw weakness on Tuesday amid renewed strength in the US Dollar (USD). EUR’s losses were cushioned by persistent hawkishness from European Central Bank (ECB) officials, though.
Speaking on Tuesday, ECB Chief Economist Philip Lane signalled that the ECB would press ahead with additional interest rate increases.
A forecast improvement in German consumer confidence could help EUR regain lost ground today.
US Dollar (USD) Recovers Lost Ground as Risk Appetite Worsens
A risk-off market mood helped the US Dollar to stage a rebound over the course of Tuesday. The safe-haven ‘Greenback’ benefitted from fears of a widespread economic slowdown.
Bets on further interest rate hikes from the Federal Reserve also continued to lend support to USD. The currency’s gains were capped by fears the US may hit its debt ceiling this year, however.
A forecast strong recovery in US durable goods orders could bolster the US Dollar today.
Canadian Dollar (CAD) Pulled Lower by Oil Price Weakness
The commodity-tied Canadian Dollar (CAD) edged lower on Tuesday as oil prices dipped. Fears of a global slowdown weighed on crude oil prices yesterday.
The ‘Loonie’ could slide overnight if the Bank of Canada’s (BoC) latest meeting minutes reaffirm the central bank’s dovish tone.
Apr 26th 08:45 NZD Balance of Trade (Mar) NZ$-0.7bn
Apr 26th 11:30 AUD Inflation Rate (Q1) 6.9%
Apr 26th 16:00 EUR German Gfk Consumer Confidence (May) -27.9
Apr 26th 20:00 GBP CBI Distributive Trades (Apr) 0
Apr 26th 22:30 USD Durable Goods Orders (Mar) 0.7%
Apr 27th 03:30 CAD BoC Summary of Deliberations