Australian Dollar (AUD) Falls following Weaker PMIs
The Australian Dollar (AUD) dropped yesterday, with weaker-than-forecast PMI results putting pressure on the ‘Aussie’.
AUD faced steeper losses during European trade, as a souring market mood saw traders shun the risk-sensitive currency.
Market-moving Australian data is thin on the ground today. As a result, risk sentiment could continue to drive AUD exchange rates.
New Zealand Dollar (NZD) Declines amid Risk-Off Mood
After initially edging higher yesterday, the New Zealand Dollar (NZD) then declined as risk aversion swept markets.
Expectations of a hawkish hike from the Reserve Bank of New Zealand (RBNZ) at its meeting today prevented steeper losses for the ‘Kiwi’.
The RBNZ decision is at noon today and markets expect the bank to raise rates and hint at more hikes to come. If so, the New Zealand Dollar could soar.
Pound (GBP) Rebounds from Post-PMI Slump
The Pound (GBP) slipped at the start of the European trading session after the UK’s latest PMI results came in lower than anticipated.
However, expectations for more Bank of England (BoE) interest rate rises helped Sterling bounce back. Upgraded UK growth forecasts from the International Monetary Fund (IMF) also aided the Pound’s recovery.
The focus for GBP investors looking forward will be the UK’s latest consumer price index. Although headline inflation is forecast to fall sharply, core inflation is expected to prove more persistent. We could see notable volatility.
Euro (EUR) Undermined by Contracting Factory Activity
The safer Euro (EUR) found success against some of its riskier peers yesterday amid a bearish market mood.
However, downbeat Eurozone PMI data saw the single currency slip against its stronger rivals. Private sector activity slowed, with the manufacturing PMI score hitting its lowest level in almost three years.
Later this evening, Germany’s latest business climate indicator is due out. Could a decline in morale weigh on EUR?
US Dollar (USD) Sheds Gains amid Debt Ceiling Jitters
Yesterday’s gloomy market mood saw the safe-haven US Dollar (USD) surge, while Federal Reserve rate hike bets added to the upside.
The ‘Greenback’ reversed its direction later on, however, amid reports that President Joe Biden and House Speaker Kevin McCarthy ‘are nowhere near a deal yet’ on raising the debt ceiling. The prospect of a US debt default spooked USD investors.
Turning to today’s session, US data is in short supply. Will ongoing worries about the debt ceiling deadlock keep USD rates subdued?
Canadian Dollar (CAD) Lifted by Rising Oil Prices
The Canadian Dollar (CAD) moved higher against some of its peers yesterday as an uptick in oil prices boosted the commodity-linked ‘Loonie’.
If crude prices continue to rise today, CAD exchange rates could enjoy further gains.
Data Releases
May 24th 12:00 NZD RBNZ Interest Rate Decision 5.5%
May 24th 16:00 GBP Inflation Rate (Apr) 8.2%
May 24th 18:00 EUR German Ifo Business Climate (May) 93
May 24th 19:30 GBP BoE Gov Bailey Speech