Australian Dollar (AUD) Surges on Bullish Market Mood
Wednesday saw the Australian Dollar (AUD) surge against most peers, as a bullish market mood propelled the risk-sensitive currency.
Furthermore, a speech from Reserve Bank of Australia (RBA) Governor Phillip Lowe opened the door to another rate hike. As such, investors moved to support AUD and bet on further tightening.
Later this morning, if Australian consumer inflation expectations cool as expected, AUD could weaken.
New Zealand Dollar (NZD) Capped by RBNZ Hike Pause
The New Zealand Dollar (NZD) strengthened against its peers yesterday, despite the Reserve Bank of New Zealand (RBNZ) holding interest rates steady.
The pause did limit NZD’s upside, however, preventing the ‘Kiwi’ from fully capitalising on the cheery trade seen across markets.
Over today’s session, the New Zealand Dollar could see variable trade as investors digest the morning’s PMI release.
Pound (GBP) Stumbles as Wage Growth Momentum Recedes
Continued momentum from Bank of England (BoE) rate hike bets only carried the Pound (GBP) so far yesterday.
Due to a lack of fresh data catalysts, Sterling was unable to firmly capitalise on an upbeat market mood, losing out against riskier peers.
British GDP data for May is set to print later. Could a contraction in the UK economy weigh on Sterling?
Euro (EUR) Cushioned by Negative US Dollar Correlation
While strengthening against some peers, the Euro (EUR) traded with an unclear direction over the course of Wednesday’s session.
The common currency’s negative correlation to a tanking US Dollar (USD) brought some cushioning, but minimal data prevented firm gains.
Tonight, the European Central Bank (ECB) monetary policy meeting accounts are set for publication. If they sound hawkish and indicate further hikes, EUR could strengthen.
US Dollar (USD) Sinks as Inflation Cools Sharply
The US Dollar sank during yesterday’s session following the release of the latest consumer price index.
Both headline and core inflation cooled far more than forecast, sparking a USD selloff as the need for further Federal Reserve policy tightening diminishes.
Tonight, June’s producer price index is due to print. Economists currently forecast an increase of 0.2%, which could lift USD.
Canadian Dollar (CAD) Choppy despite BoC Hike
Volatile trade embroiled the Canadian Dollar (CAD) yesterday, as its close correlation to a sinking US Dollar stymied gains prompted by the Bank of Canada’s (BoC) 25bps hike.
The ‘Loonie’ may continue to see choppy trade today, as markets digest the BoC’s hike and accompanying forward guidance.
Data Releases
Jul 13th 08:30 NZD BusinessNZ PMI (Jun) 49.8
Jul 13th 11:00 AUD Consumer Inflation Expectations (Jul) 5.1%
Jul 13th 16:00 GBP GDP (May) -0.3%
Jul 13th 21:30 EUR ECB Monetary Policy Meeting Accounts
Jul 13th 22:30 USD PPI (Jun) 0.2%
Jul 13th 22:30 USD Initial Jobless Claims (8/Jul) 250,000