Australian Dollar (AUD) Rises amid Surprise Retail Recovery
On Thursday, the Australian Dollar (AUD) managed to gather strength following a surprise increase in retail sales.
May’s data printed at 0.7%, with year-end sales seen as a cause for the recovery. This apparent resilience suggested room for additional policy tightening from the Reserve Bank of Australia (RBA), prompting investors to increase bets on a further 25bps hike.
Due to AUD’s status as a Chinese proxy currency, if China’s private sector PMIs show a mixed picture this morning, as expected, the ‘Aussie’ could weaken.
New Zealand Dollar (NZD) Firms amid Decreased Business Pessimism
Yesterday, New Zealand’s business confidence index for June printed far above forecasts, bringing support to the New Zealand Dollar (NZD).
The index was forecast to print at -28.1, but instead rose to -18 – its highest level since January 2022. However, uncertainty still remains amongst businesses, which likely capped these gains.
Much like the ‘Aussie’, the ‘Kiwi’ may trade in tandem with China’s PMIs today. If they surprise to the upside, NZD could rally.
Pound (GBP) Muted as Water Sector Crisis Continues
An increasingly bleak economic outlook for the UK muted the Pound (GBP) during Thursday’s session, preventing any sustainable upside.
The crisis currently embroiling the UK’s water sector continued, with rumours that taxpayers would foot the bill for a government bailout. The precarious situation stoked fears of a ‘hard landing’ for the UK economy, undermining sentiment towards GBP.
This afternoon brings the final UK GDP growth rate for the first quarter of this year. Could a revised reading spark volatility in the Pound?
Euro (EUR) Subdued despite Hotter-than-Expected German Inflation
Despite hotter-than-forecast German inflation data, the Euro (EUR) was unable to press the advantage yesterday.
The single currency found itself struggling for support as American trade began, due to the Euro’s negative correlation with a rallying US Dollar (USD).
The latest Eurozone consumer price index is set to print this evening. While a cooldown in headline inflation may wound EUR, an uptick in the core reading could counter the downside.
US Dollar (USD) Firms as GDP Growth Beats Forecasts
Following the final Q1 GDP reading, the US Dollar firmed last night. The US economy expanded more than initially estimated through the first three months of this year, opening up room for further Federal Reserve rate hikes.
This buoyancy was accompanied by a decrease in jobless claims over the past week, adding to Fed bets.
Tonight, the Fed’s preferred gauge of inflation is scheduled to print. With a hold expected in the core PCE price index for May, the ‘Greenback’ could rally amid signs of sticky inflation.
Canadian Dollar (CAD) Swings amid Volatile Oil Prices
Over Thursday’s session oil prices swung wildly, prompting the crude-linked Canadian Dollar (CAD) to see volatile trade.
Looking ahead, Canada’s GDP is forecast to have recovered slightly in April. Will this be enough to support the ‘Loonie’ during today’s session?
Data Releases
Jun 30th 16:00 EUR DE Retail Sales (May) 0%
Jun 30th 16:00 GBP GDP Growth Rate (Q1) 0.1%
Jun 30th 19:00 EUR Inflation Rate (Jun) 5.6%
Jun 30th 19:00 EUR Unemployment Rate (May) 6.5%
Jun 30th 22:30 CAD GDP (Apr) 0.2%
Jun 30th 22:30 USD Core PCE Price index (May) 4.7%