Australian Dollar (AUD) Slips following Chinese Trade Report
A pullback in global risk appetite kept pressure on the risk-sensitive Australian Dollar (AUD) yesterday.
Downbeat Chinese trade data also undermined the ‘Aussie’ amid fears of a slower recovery in the world’s second-largest economy.
This morning, the Australian Dollar could face some selling pressure if consumer confidence in May declines as forecast.
New Zealand Dollar (NZD) Drops amid Risk-Off Mood
The New Zealand Dollar (NZD) weakened over the course of Tuesday. A risk-off mood dampened enthusiasm for the risk-sensitive ‘Kiwi’.
A generally downbeat mood in the commodity markets and a stronger US Dollar (USD) also pulled NZD lower.
If risk appetite remains cautious today then the ‘Kiwi’ could see additional losses.
Pound (GBP) Gains after Better-than-Expected Retail Sales Figures
The Pound (GBP) firmed on Tuesday after above-forecast sales figures from the British Retail Consortium (BRC). Sales increased by 5.2% last month.
Sterling also found support from Bank of England (BoE) rate hike bets ahead of the central bank’s interest rate decision later in the week.
With no significant data releases today, GBP could continue to be buoyed by BoE rate hike bets.
Euro (EUR) on Back Foot despite Hawkish ECB Comments
Renewed demand for the US Dollar pushed the Euro (EUR) lower yesterday. The losses for EUR came despite a cautious mood in the markets and hawkish comments from European Central Bank (ECB) policymakers.
Speaking on Tuesday, ECB rate-setter Peter Kazimir signalled that the central bank may need to keep interest rates higher for longer.
The final reading of Germany’s April inflation could limit ECB bets today if the figures confirm a cooldown. The Euro could lose ground as a result.
US Dollar (USD) Supported by Risk Appetite Pullback
A retreat in risk appetite strengthened the US Dollar on Tuesday. Markets were cautious ahead of tonight’s high-impact US inflation data.
The safe-haven ‘Greenback’ saw its gains capped by fears of a collapse in the US debt ceiling, though. Turmoil in the US banking sector also hobbled USD amid bets on a pause in rate hikes from the Federal Reserve.
Looking ahead, signs of persistently sticky US inflation could boost the ‘Greenback’ tonight. However, if American inflation unexpectedly cools, USD could tumble.
Canadian Dollar (CAD) Dented by Oil Price Profit-Taking
The crude-tied Canadian Dollar (CAD) edged lower yesterday as oil prices retreated. The commodity suffered from profit-taking after a recent recovery.
A further decline in oil prices could weigh on the ‘Loonie’ today.
May 10th 11:30 AUD Westpac Consumer Confidence Index (May) 82.1
May 10th 16:00 EUR German Inflation Rate Final (Apr) 7.2%
May 10th 22:30 USD Inflation Rate (Apr) 5%