Australian Dollar (AUD) Falls as Iron Prices Slide
A sharp decline in iron ore prices pulled the Australian Dollar (AUD) lower at the end of last week. The price of the commodity fell after signs of a slowdown in China’s economic recovery.
Meanwhile, a generally downbeat tone in markets also contributed to the risk-sensitive currency’s downside.
With no data due out today, the ‘Aussie’ could remain weak if risk aversion persists.
New Zealand Dollar (NZD) Plunges amid Lower Inflation Expectations
The New Zealand Dollar (NZD) tumbled on Friday. The downturn in the ‘Kiwi’ came after a below-forecast reading of April’s business PMI remained in negative territory.
A decline in business inflation expectations also dented NZD by prompting markets to pare back Reserve Bank of New Zealand (RBNZ) rate hike expectations.
Turning to today, a forecast positive reading for service sector output could boost NZD.
Pound (GBP) Rudderless after Mixed GDP Data
The Pound (GBP) traded without a clear direction on Friday following mixed GDP data.
Although the UK economy expanded by 0.1% in the first quarter of this year, it unexpectedly contracted by 0.3% in March. Sterling movement was mixed following the data.
With nothing on the calendar today, GBP exchange rates could trade in a narrow range.
Euro (EUR) Muted despite Hawkish ECB Signals
The Euro (EUR) was subdued at the end of last week amid thin trading conditions. Lingering headwinds from earlier in the week saw EUR soften.
However, EUR’s downside was cushioned by hawkish European Central Bank (ECB) rhetoric. ECB policymaker Joachim Nagel signalled the need for additional rate hikes.
This evening, the latest Eurozone industrial production data is forecast to show a sharp decline in activity. This could dent EUR.
US Dollar (USD) Buoyed by Cautious Market Mood
A risk-off impulse helped the safe-haven US Dollar (USD) to edge higher at the end of last week. A sharper-than-forecast fall in US consumer sentiment in May undermined USD, though.
Fears over a collapse in the US debt ceiling also tempered USD’s gains on Friday.
Looking ahead, multiple speeches from Federal Reserve officials could see USD fall if they reaffirm the Fed’s expected policy tightening pause.
Canadian Dollar (CAD) Rebounds as Oil Prices Recover
The commodity-linked Canadian Dollar (CAD) initially slipped on Friday as oil prices continued to fall. However, a recovery in crude saw CAD recoup losses as the American session began.
Turning to today’s session, movements in the oil market could continue driving CAD.
May 15th 08:30 NZD Services NZ PSI 54
May 15th 19:00 EUR Industrial Production (Mar) -2.5%
May 15th 22:45 USD Fed Bostic Speech
May 15th 23:15 USD Fed Kashkari Speech
May 16th 02:30 USD Fed Barkin Speech