Australian Dollar (AUD) Rises following Hawkish RBA Statement
The Australian Dollar (AUD) was buoyed by hawkish signals in the Reserve Bank of Australia’s (RBA) latest policy statement at the end of last week.
Additionally, the risk-sensitive ‘Aussie’ benefitted from a positive market mood. An April slowdown in China’s services sector capped AUD’s gains, however, as did a drop in coal and iron ore prices.
Further RBA rate hike bets and a positive risk tone could push AUD higher today.
New Zealand Dollar (NZD) Slips amid US Fed Bets
The renewed prospect of more policy tightening from the US Federal Reserve weighed on the New Zealand Dollar (NZD) on Friday.
On the other hand, a return of risk appetite cushioned losses for the risk-sensitive ‘Kiwi’.
Amid a lack of New Zealand data today, market sentiment could continue to drive NZD movement.
Pound (GBP) Firms as Markets Bet on 25bps BoE Hike
The Pound (GBP) edged higher at the end of last week. Bank of England (BoE) rate hike bets strengthened Sterling over the course of the day as markets continued to price in a 25bps rate hike at the bank’s meeting later this week.
However, a lack of UK economic data limited the Pound’s movement.
GBP could hold its ground today if markets remain convinced that the BoE will raise rates at its upcoming meeting.
Euro (EUR) Drops after Retail Sales Slump
The Euro (EUR) stumbled on Friday following disappointing private sector data. Eurozone retail sales fell by 1.2% in March, far worse than the forecast decline of 0.1%.
A return of risk appetite and resurgent US Dollar (USD) also sapped demand for EUR at the end of last week.
Looking to today, a forecast contraction in German industrial production could pull the Euro lower.
US Dollar (USD) Rallies following Hot Non-Farm Payrolls Data
Hotter-than-expected jobs data helped the US Dollar to recoup its losses on Friday. April’s non-farm payrolls smashed forecasts to rise by 253,000. A surprise fall in unemployment also supported USD.
The data indicated that the US labour market remains tight, increasing the possibility that the Federal Reserve may choose to raise interest rates again, despite hinting at a policy pause earlier in the week.
Tailwinds from the strong jobs data could persist into this week’s trade, potentially lifting USD despite a lack of data.
Canadian Dollar (CAD) Lifted by Oil Price Recovery
A rebound in crude oil prices bolstered the commodity-linked Canadian Dollar (CAD) on Friday. April’s employment data also boosted the ‘Loonie’ as Canada’s jobless rate held steady at 5% rather than rising to 5.1%.
CAD could rise today if crude prices continue to gain ground.
May 8th 11:30 AUD NAB Business Confidence (Apr) 1
May 8th 16:00 EUR German Industrial Production (Mar) -1%