Australian Dollar (AUD) Climbs Ahead of RBA Meeting
The Australian Dollar (AUD) firmed on Monday. A return of risk appetite underpinned the risk-sensitive ‘Aussie’, as did bets on another rate hike from the Reserve Bank of Australia (RBA) at today’s meeting.
An upward revision in the final reading of May’s services PMI also lent support to AUD. The PMI represented the second consecutive month of expansion in the services sector.
This afternoon brings the RBA’s latest interest rate decision. AUD could surge if the central bank surprises markets with another rate hike.
New Zealand Dollar (NZD) Boosted by Upbeat Market Mood
The risk-sensitive New Zealand Dollar (NZD) was buoyed by a risk-on mood yesterday.
NZD also saw gains after an above-forecast PMI for China’s services sector. The evidence of strong domestic demand ignited hopes of a robust recovery in the Chinese economy.
The ‘Kiwi’ Dollar’s positive correlation with the ‘Aussie’ could drive NZD movement today, as investors respond to the RBA decision.
Pound (GBP) Slips amid Thin Trading Conditions
Thin trading conditions saw the Pound (GBP) stumble yesterday. Markets had largely priced in further Bank of England (BoE) rate hikes, leaving little impetus for movement in GBP.
However, Sterling’s losses were cushioned by a return of global risk appetite.
Sales figures from the British Retail Consortium (BRC) this morning could lift the Pound if they tick higher as expected.
Euro (EUR) Gains despite Mixed ECB Signals
The Euro (EUR) was supported by hawkish comments from European Central Bank (ECB) President Christine Lagarde yesterday.
On the other hand, EUR came under pressure from a positive risk tone. A fall in Eurozone PPI also weighed on the single currency, as it indicates easing inflationary pressures.
This evening’s forecast rebound in Eurozone retail sales could strengthen the Euro, although the recovery is forecast to be modest.
US Dollar (USD) Falls after Disappointing Services PMI
The US Dollar (USD) initially saw gains yesterday off the back of last week’s strong non-farm payrolls figures.
Worse-than-expected performance in the US services sector then saw USD stumble. Activity unexpectedly decreased last month, slowing to a near standstill.
A lack of data for the US Dollar today could see the safe-haven currency fall further if the market mood remains risk-on.
Canadian Dollar (CAD) Firms as Signals of Tighter Supply Bolster Oil Prices
The commodity-linked Canadian Dollar (CAD) was pushed higher by rising oil prices yesterday. The prospect of tighter oil supplies saw crude prices climb as oil producers announced output cuts.
A positive reading of May’s private sector PMI could boost the ‘Loonie’ overnight, if it prints as forecast.
Data Calendar
Jun 6th 09:01 GBP BRC Retail Sales Monitor (May) 5.4%
Jun 6th 14:30 AUD RBA Interest Rate Decision 3.85%
Jun 6th 18:00 EUR ECB Consumer Expectations Survey
Jun 6th 19:00 EUR Retail Sales (Apr) 0.2%
Jun 7th 00:00 CAD Ivey PMI (May) 56.5