Australian Dollar (AUD) Struggles amid Profit-Taking
The Australian Dollar (AUD) slipped on Wednesday. AUD suffered from some profit-taking, having soared higher following Tuesday’s Reserve Bank of Australia (RBA) surprise rate hike.
A return of risk appetite cushioned losses for the risk-sensitive ‘Aussie’. Additionally, above-forecast retail sales and private sector output data prevented a deeper downturn for AUD.
A forecast narrowing in Australia’s trade surplus could spell further losses for AUD today.
New Zealand Dollar (NZD) Pulled Lower by Commodity Market Decline
The New Zealand Dollar (NZD) initially rose yesterday after employment data beat forecasts.
However, a downbeat mood in the commodity markets weighed on the resource-linked ‘Kiwi’ in later trade, seeing it slide against its stronger peers.
With nothing on the data calendar for NZD today, a persistent fall in commodity prices could compound the currency’s losses.
Pound (GBP) Gains amid BoE Rate Hike Bets
The Pound (GBP) firmed on Wednesday without a clear catalyst. Sterling likely found support from market expectations of a 25bps interest rate hike from the Bank of England (BoE) next week.
Some economists are even speculating about an additional hike from the BoE in June. Analysts highlighted the surprise upside to inflation and strong wage growth as factors.
Sterling could continue to edge higher today if the final reading of April’s services PMI prints as expected. The PMI is set to confirm that private sector activity hit a 12-month high.
Euro (EUR) Rises as Low Unemployment Bolsters ECB Bets
Persistently low Eurozone unemployment lifted the Euro (EUR) on Wednesday. March’s unemployment rate fell to 6.5% – a fresh record low – which strengthened bets on a rate hike from the European Central Bank (ECB) tonight.
On the other hand, EUR lost some strength as markets remained tentative ahead of the ECB’s decision.
EUR could climb higher today if the ECB hikes rates as forecast and signals further policy tightening in the coming months.
US Dollar (USD) Volatile amid Fed Interest Rate Decision
The US Dollar (USD) initially slipped on Wednesday ahead of the Federal Reserve’s interest rate decision. The US debt ceiling crisis dampened enthusiasm for USD.
Evidence of cooler wage growth prompted deeper losses in USD. The Fed’s policy meeting injected fresh volatility into the ‘Greenback’, as markets digested the decision.
Movement in the US Dollar today could continue to be driven by the market reaction to the Fed’s decision.
Canadian Dollar (CAD) Slips as Oil Prices Crater
A slump in crude oil prices piled pressure on the commodity-tied Canadian Dollar (CAD) yesterday.
The ‘Loonie’ could come under more pressure today if oil prices fall further. Additionally, a forecast downturn in private sector performance could pull CAD lower.
May 4th 11:30 AUD Balance of Trade (Mar) AU$12.65bn
May 4th 22:15 EUR ECB Interest Rate Decision 3.75%
May 4th 22:30 USD Initial Jobless Claims (29/Apr) 240,000
May 5th 00:00 CAD IVEY PMI (Apr) 53