Australian Dollar (AUD) Mixed amid Hawkish RBA Pause
Mixed trade coloured the Australian Dollar (AUD) on Tuesday, following the Reserve Bank of Australia’s (RBA) latest interest rate decision.
While the RBA opted to pause their current tightening cycle, the door was left open to rate hikes in the future. Investors are anticipating a minimum of one more hike, potentially in August. AUD fluctuated in response.
This morning, the RBA are due to release their latest chart pack. If this contains positive news for the Australian economy, AUD rates could rally.
New Zealand Dollar (NZD) Strengthens as Business Confidence Improves
Yesterday, the New Zealand Dollar (NZD) strengthened amid news that business confidence was continuing to improve.
The ‘Kiwi’ also enjoyed support amid an upbeat market mood and a pullback in the US Dollar (USD), with which NZD is negatively correlated.
With little data on the cards today, the New Zealand Dollar could be left vulnerable to shifts in market sentiment. If the mood sours, this could weigh on NZD.
Pound (GBP) Buoyed by Bullish Trade
Despite a lack of data drivers, the Pound (GBP) strengthened against safer assets during yesterday’s session.
As Sterling holds an increasingly risk-sensitive nature, the bullish market mood prompted GBP to shrug off persistent economic anxieties.
Looking ahead, the UK’s final services PMI this evening could impact Sterling, particularly if it differs from the preliminary reading.
Euro (EUR) Dented by German Trade Surplus Drop
A sharp drop in the German trade surplus dragged down the Euro (EUR) yesterday, as the reading came in far below forecasts.
Falling to €14.4bn from €16.5bn, the drop reflected the continued struggles blighting the Eurozone’s largest economy. German exports unexpectedly declined by 0.1%, which further dented the single currency.
This evening, the final Eurozone services index is due to print. If this confirms a slowdown in the sector, or even prints lower, EUR could weaken.
US Dollar (USD) Dips during Independence Day
The US markets were closed yesterday as the country celebrated Independence Day.
As such, the safe-haven US Dollar (USD) was unable to stand its ground amid cheery trade.
Following the market closure, today’s absence of releases may mean the ‘Greenback’ remains vulnerable to risk appetite. USD could also see muted trade ahead of the Federal Reserve’s latest meeting minutes, which are due out overnight.
Canadian Dollar (CAD) Supported by Climbing Oil Prices
Oil prices continued to rally yesterday, allowing the crude-linked Canadian Dollar (CAD) to shrug off a downbeat manufacturing index print.
During today’s session, oil price fluctuations could continue to drive the ‘Loonie’ amid a lack of Canadian data.
Data Releases
Jul 5th 09:00 AUD Services PMI Final (Jun) 50.7
Jul 5th 09:00 AUD Ai Group Industry Index (Jun) -14
Jul 5th 11:30 AUD RBA Chart Pack
Jul 5th 11:30 AUD Retail Sales Final (May) 0.7%
Jul 5th 18:00 EUR Services PMI Final (Jun) 52.4
Jul 5th 18:30 GBP Services PMI Final (Jun) 53.7