Australian Dollar (AUD) Climbs as RBA Bets Intensify
The prospect of additional Reserve Bank of Australia (RBA) interest rate increases boosted the Australian Dollar (AUD) on Friday. The renewed bets came after Australia raised its minimum wage by 5.75%.
The risk-sensitive ‘Aussie’ was also strengthened by a risk-on mood as well as a recovery in the price of iron ore.
This morning’s final services PMI figures could push AUD higher if they confirm a fourth consecutive month of growth in the sector.
New Zealand Dollar (NZD) Firms amid Risk-On Mood
The risk-sensitive New Zealand Dollar (NZD) rose at the end of last week as market risk tone improved.
The cheery mood came after the US Senate narrowly passed legislation to lift the debt ceiling limit, thereby averting a potentially catastrophic economic crisis.
If markets remain risk-on today, we could see NZD make additional gains.
Pound (GBP) Treads Water amid Lack of Data
Thin trading conditions for the Pound (GBP) on Friday prompted muted movements in the currency.
However, Sterling resisted steep losses thanks to ongoing bets on more interest rate rises from the Bank of England (BoE).
This evening, the final reading of May’s services PMI may prompt gains in GBP if it confirms strong growth in the sector.
Euro (EUR) Subdued despite Hawkish ECB Comments
The Euro (EUR) traded narrowly on Friday, despite hawkish comments from European Central Bank (ECB).
An upbeat mood put pressure on the safer Euro, preventing gains for the currency, while a lack of Eurozone data added to the muted movement.
Barring any deviation from preliminary estimates, tonight’s final Eurozone PMI is unlikely to trigger much movement. As a result, EUR could be subdued again today.
US Dollar (USD) Buoyed by Above-Forecast NFP Figures
The US Dollar (USD) made a modest recovery on Friday after mixed employment data. May’s non-farm payrolls mashed forecasts as the US economy added 339,000 jobs.
On the other hand, the unemployment rate rose unexpectedly to 3.7%. This, alongside a risk-on mood, capped gains for the safe-haven ‘Greenback’ as Federal Reserve rate hike bets remained limited.
Looking ahead, an expected improvement in the ISM services PMI could boost the US Dollar tonight.
Canadian Dollar (CAD) Lifted by Oil Price Rebound
The commodity-linked Canadian Dollar (CAD) rose at the end of last week. The ‘Loonie’ was bolstered by a recovery in crude oil prices on Friday.
With no data releases for CAD today, the currency could climb higher if oil prices continue to improve.
Jun 5th 09:00 AUD Judo Bank Services PMI Final (May) 51.8
Jun 5th 16:00 EUR German Balance of Trade (Apr) €15.1bn
Jun 5th 18:00 EUR HCOB Services PMI Final (May) 55.9
Jun 5th 18:30 GBP S&P/Global CIPS Services PMI Final (May) 55.1
Jun 6th 00:00 USD ISM Services PMI Final (May) 52.2