Australian Dollar (AUD) Rebounds despite Risk-Off Mood
The Australian Dollar (AUD) initially stumbled this week as a souring market mood sapped demand for the risk-sensitive ‘Aussie’.
However, AUD was able to bounce back in the European session, without a clear catalyst for the movement.
Turning to today, the latest PMI surveys are in focus. Evidence of an ongoing contraction in manufacturing activity could hurt AUD, though strength in the services sector may limit losses.
New Zealand Dollar (NZD) Underpinned by RBNZ Bets
Similarly, the New Zealand Dollar (NZD) faced initial pressure amid a risk-averse market mood before quickly rebounding and edging higher against some of its peers.
Ongoing bets on another Reserve Bank of New Zealand (RBNZ) interest rate hike may have supported the ‘Kiwi’.
Looking ahead, New Zealand data is thin on the ground today. As a result, risk appetite could drive most NZD movement.
Pound (GBP) Fluctuates Lower amid Lack of Data
Pound Sterling (GBP) started this week’s session with volatility, zigzagging lower against many of its peers.
A gloomy market mood pressured the increasingly risk-sensitive UK currency while a lack of economic data exposed it to losses.
The UK PMIs are also due out this evening. A slowdown in activity could dent the Pound, although any signs of ongoing inflationary pressures may lend the currency some support.
Euro (EUR) Mixed despite Downbeat Mood
The Euro (EUR) traded without a clear direction yesterday, despite a downbeat market mood lending the safer single currency some support.
EUR’s negative correlation with a stronger US Dollar (USD) put some pressure on the Euro, while a weaker-than-expected consumer confidence reading also dented EUR demand.
If the Eurozone PMIs later today raise concerns about weakening private sector activity then the single currency could face headwinds.
US Dollar (USD) Firms as Sentiment Sours
The US Dollar made modest gains yesterday as a bearish mood increased the safe-haven currency’s appeal.
The risk-negative market mood came amid increasing Sino-American economic tensions, after Beijing banned memory chips made by US tech company Micron.
Although not as impactful as the ISM releases, tonight’s PMIs from S&P Global could dampen USD demand. Economists expect a weaker services reading, while factory activity is forecast to stall.
Canadian Dollar (CAD) Wavers despite USD Strength
The crude-linked Canadian Dollar (CAD) wobbled during yesterday’s trade as weaker oil prices were offset by an uptick in USD, with which CAD is positively correlated.
Later tonight, Canadian PPI data from April could impact CAD. Will another uptick in producer prices stoke speculation that the Bank of Canada (BoC) may need to tighten monetary policy again?
May 23rd 09:00 AUD Manufacturing PMI (May) 47.6
May 23rd 09:00 AUD Services PMI (May) 54.1
May 23rd 18:00 EUR Manufacturing PMI (May) 46.2
May 23rd 18:00 EUR Services PMI (May) 55.6
May 23rd 18:30 GBP Manufacturing PMI (May) 48
May 23rd 18:30 GBP Services PMI (May) 55.5
May 23rd 22:30 CAD PPI (Apr) 0.3%
May 23rd 23:45 USD Manufacturing PMI (May) 50
May 23rd 23:45 USD Services PMI (May) 52.6