Australian Dollar (AUD) Weakens as Market Mood Sours
Diminished risk appetite served to push the Australian Dollar (AUD) lower yesterday, amid a lack of economic data.
Furthermore, continued recalibration of rate hike bets may have dampened the ‘Aussie’ Dollar’s appeal during the session.
Owing to a lack of macroeconomic data today, the ‘Aussie’ could once again struggle for support. However, a shift in risk appetite could bring some cheer.
New Zealand Dollar (NZD) Rangebound as Investors Buy the Dip
Following the New Zealand Dollar’s (NZD) recent losses, the currency traded in muted capacity during Wednesday’s session.
While risk-averse trade likely prevented significant gains, dip-buying appeared to support the ‘Kiwi’ throughout the session.
This morning, New Zealand’s latest balance of trade data is due out. Could a trade deficit weigh on the resource-linked ‘Kiwi’?
Pound (GBP) Dented by Rate Hike Anxiety
Despite a surprise leap in core inflation, the Pound (GBP) lost ground against many peers during yesterday’s trade.
With investors now expecting the Bank of England (BoE) to raise rates to 6%, anxiety appeared to build over the detrimental economic effects of further hikes. Many analysts believe the BoE will need to trigger a recession to bring inflation back down.
The BoE meets tonight to set rates. If they pursue a 50bps hike, Sterling may climb higher. However, recession fears could cap gains.
Euro (EUR) Remains Supported by ECB Rate Hike Bets
Continued European Central Bank (ECB) rate hike bets strengthened the Euro (EUR) on Wednesday, with a souring market mood lending further support.
These gains may have been capped, however, by bleak predictions for Germany’s economic health. Ifo published a report stating that Germany’s recession may be sharper than expected.
The Eurozone is set to see little in the way of data releases today. Because of this, the common currency may trade without a clear direction.
US Dollar (USD) Firms Post Powell Testimony
Yesterday saw the US Dollar (USD) gain ground as a bearish market mood buoyed the safe-haven ‘Greenback’.
Federal Reserve Chair Jerome Powell’s Senatorial testimony overnight also lent some modest support to USD. Powell indicated that further Fed hikes were likely.
This evening, USD could find fresh impetus from the latest initial jobless claims data. Following last week’s shock jump, an elevated figure could weigh on the ‘Greenback’.
Canadian Dollar (CAD) Climbs on Retail Recovery
The Canadian Dollar (CAD) rallied yesterday, as retail sales recovered significantly more than expected over April.
Due to a lack of data, the ‘Loonie’ may trade in tandem with oil price dynamics and its correlation to the ‘Greenback’ today.
Data Releases
Jun 22nd 08:45 NZD Balance of Trade (May) NZ$-0.35bn
Jun 22nd 21:00 GBP BoE Interest Rate Decision 4.75%
Jun 22nd 22:30 USD Initial Jobless Claims (Jun 17th) 260,000