Australian Dollar (AUD) Slides amid Inflation Cooldown
Wednesday saw the Australian Dollar (AUD) fall sharply lower following the latest consumer price index release.
Headline inflation in Australia cooled to 5.6% in May, below expectations of 6.1%. Because of this, investors pared back their bets on another interest rate hike from the Reserve Bank of Australia (RBA).
The latest Australian retail sales data is due to print this morning, reflecting May’s sales. Economists forecast a 0.1% increase over the month. Could this modest rise cheer AUD investors?
New Zealand Dollar (NZD) Plummets amid Sino-American Trade Tensions
Flaring tensions between Beijing and Washington blighted the New Zealand Dollar (NZD) yesterday, due to New Zealand’s close trade links with China.
Reports began to circulate that America was considering restrictions on AI chip exports to China, over concerns they’d be repurposed for weaponry.
Later this morning, the ANZ business confidence index is due out. Could an improved reading boost the ‘Kiwi’ Dollar?
Pound (GBP) Undermined by Recession Anxiety
Growing fears over a UK recession prevented the Pound (GBP) from garnering much support during Wednesday’s session.
Furthermore, a lack of impactful data releases likely contributed to waning sentiment towards Sterling. Hawkish comments from Bank of England (BoE) Governor Andrew Bailey did little to assuage fears.
Due to a lack of data on the calendar, Sterling may continue to struggle today, particularly if UK economic fears persist.
Euro (EUR) Climbs as July Rate Hike Confirmed
European Central Bank (ECB) President Christine Lagarde’s confirmation of a July rate hike supported the Euro (EUR) during Wednesday’s session.
With Lagarde reiterating the bank’s hawkish stance, the single currency was able to gain ground against most peers, despite a downbeat German consumer confidence reading.
Tonight, Germany’s consumer price index for June could bring strength to EUR, if it increases as economists are forecasting. Signs of persistent inflation would boost ECB bets.
US Dollar (USD) Soars as Powell Suggests Further Tightening
Wednesday brought a firm recovery for the safe-haven US Dollar (USD), as growing Sino-American tensions over AI chip trade soured the market mood.
Furthermore, comments from Federal Reserve Chair Jerome Powell further boosted the ‘Greenback’. He suggested that the Fed’s current policy wasn’t ‘restrictive enough’, amplifying rate hike bets.
This afternoon, another speech from the Fed Chair could bring cheer to the ‘Greenback’ if he again hints at further rate hikes.
Canadian Dollar (CAD) Propped Up by USD Correlation
The Canadian Dollar (CAD) was mixed yesterday, rising against its weaker peers thanks to its positive correlation with the US Dollar, but ceding ground elsewhere.
Due to a lack of impactful data, the ‘Loonie’ may be unable to find directional trade during today’s session. Movements in the commodity markets could impact the crude-linked currency.
Data Releases
Jun 29th 11:00 NZD ANZ Business Confidence (Jun) -28.1
Jun 29th 11:30 AUD Retail Sales (May) 0.1%
Jun 29th 16:30 USD Fed Chair Powell Speech
Jun 29th 19:00 EUR Economic Sentiment (Jun) 96
Jun 29th 22:00 EUR DE Inflation Rate (Jun) 6.3%
Jun 29th 22:30 USD Initial Jobless Claims (24/Jun) 265,000