Australian Dollar (AUD) Buoyed by RBA Rate Hike Bets
The Australian Dollar (AUD) continued to be lifted by Reserve Bank of Australia (RBA) rate hike bets yesterday. Additionally, news that Chinese banks would be slashing deposit rates also buoyed AUD.
On the other hand, the ‘Aussie’ saw its gains hobbled by weaker-than-forecast trade data.
Looking ahead, a lack of Australian data could mute AUD movement today. Risk appetite is likely to influence the ‘Aussie’ Dollar’s fortunes.
New Zealand Dollar (NZD) Lifted by Positive Mood in Commodity Markets
An upbeat mood in the commodity markets drove the resource-linked New Zealand Dollar (NZD) higher on Thursday.
Bets on additional policy tightening from the Reserve Bank of New Zealand (RBNZ) also lent support to the ‘Kiwi’. The bets came following data indicating that 95% of businesses expect to raise wages in 2023.
With no data releases today, NZD could be driven by market risk appetite. Will a souring mood dent the New Zealand Dollar?
Pound (GBP) Firms as Markets Price in Further BoE Tightening
The Pound (GBP) edged higher on Thursday as markets continued to price in additional Bank of England (BoE) interest rate hikes.
However, Sterling found its gains firmly capped by a lack of UK economic data.
Thin GBP trading conditions are set to persist today. As a result, the Pound could trade in a narrow range.
Euro (EUR) Mixed amid News of Eurozone Recession
A downward revision to Eurozone GDP figures initially pushed the Euro (EUR) lower on Thursday. The 0.1% contraction in the first quarter of 2023 means that the bloc fell into a technical recession.
Nevertheless, the single currency managed to rally against its weaker peers. EUR was buoyed by its negative correlation to a weakening US Dollar (USD), while many economists weighed in to say that the GDP data wasn’t as bad as it seemed at first glance.
A speech from European Central Bank (ECB) Vice-President Luis de Guindos could help EUR recover lost ground this evening if he hints at further ECB rate rises.
US Dollar (USD) Weakens after Surprise Jobless Claim Rise
The US Dollar (USD) fell yesterday after US jobless claims leapt to their highest levels since October 2021.
The data pointed to slack in the US labour market, which in turn prompted a pullback in Federal Reserve rate hike bets.
USD could come under further pressure today if Fed bets remain cautious.
Canadian Dollar (CAD) Drops as Oil Prices Fall
The commodity-linked Canadian Dollar (CAD) was pulled lower by a drop in oil prices last night, while CAD’s positive correlation with USD added to the downside.
This evening’s forecast uptick in unemployment could dent confidence in CAD. If the jobless rate rises, markets may pare back Bank of Canada (BoC) rate hike bets.
Data Calendar
Jun 9th 18:00 EUR ECB de Guindos Speech
Jun 9th 22:30 CAD Unemployment Rate (May) 5.1%