Australian Dollar (AUD) Soars after RBA Surprises Markets with 25bps Hike
A surprise interest rate hike from the Reserve Bank of Australia (RBA) saw the Australian Dollar (AUD) soar yesterday.
The RBA hiked rates by 25bps and signalled that further policy tightening may be required, boosting bets on the ‘Aussie’.
This morning, Australia’s GDP growth rate for the first quarter is in focus. Could an economic expansion lift AUD? Or will signs of a slowing economy weigh on the currency?
New Zealand Dollar (NZD) Undermined by Risk-Off Mood
The New Zealand Dollar (NZD) initially firmed on Tuesday, thanks to its positive correlation with the rising ‘Aussie’ Dollar.
However, a souring market mood saw the risk-sensitive ‘Kiwi’ stumble later in the European trading session.
With no data releases due out today, NZD could continue to trade in relation to AUD movement. Will upbeat Australian GDP data lift the ‘Kiwi’?
Pound (GBP) Stumbles amid Retail Sales Slowdown
Evidence of poor UK retail sales growth from the British Retail Consortium (BRC) kept pressure on the Pound (GBP) yesterday.
Amid a lack of more impactful data, GBP traders took their cues from the sales report, which saw retail growth slow to a seven-month low.
Looking ahead, an absence of British economic data could leave the Pound to trade in a narrow range today.
Euro (EUR) Weakens as Consumers Anticipate Cooler Inflation
Expectations of easing inflationary pressures in the Eurozone weighed on the Euro (EUR) yesterday.
The European Central Bank’s (ECB) latest survey indicated that consumers anticipate inflation to fall over the next 12 months, which dented ECB rate rise bets.
A speech from ECB Vice President Luis de Guindos this evening could boost EUR, if the policymaker maintains his hawkish tone.
US Dollar (USD) Strengthened by Retreat in Risk Appetite
The US Dollar (USD) regained lost ground over the course of Tuesday. The safe-haven ‘Greenback’ benefited from a retreat in global risk appetite.
Enthusiasm for USD was dampened by expectations of a rate hike pause from the Federal Reserve, though.
Amid a lack of any notable US data today, risk appetite could continue to drive USD movement. Will a prevailing bearish mood push the ‘Greenback’ higher?
Canadian Dollar (CAD) Firms Ahead of BoC Decision
The Canadian Dollar (CAD) found support from Bank of Canada (BoC) rate hike bets on Tuesday. After a four-month policy pause, markets began betting on another increase from the central bank at tonight’s meeting.
If the BoC does deliver another rate hike – or indicates that it may do so in the future – CAD could soar.
Data Calendar
Jun 7th 09:20 AUD RBA Gov Lowe Speech
Jun 7th 11:30 AUD GDP Growth Rate (Q1) 0.3%
Jun 7th 16:00 EUR German Industrial Production (Apr) 0.6%
Jun 7th 17:50 EUR ECB de Guindos Speech
Jun 8th 00:00 CAD BoC Interest Rate Decision 4.5%