Australian Dollar (AUD) Fluctuates despite Hawkish RBA Minutes
The Australian Dollar (AUD) struggled for demand yesterday in spite of hawkish minutes from the latest Reserve Bank of Australia (RBA) policy meeting.
Despite the central bank keeping the door open to further tightening, a downbeat market mood stifled AUD’s upside potential.
The ‘Aussie’ may continue to trade on risk appetite today, amid a lack of noteworthy Australian data.
New Zealand Dollar (NZD) Tumbles on Souring Market Sentiment
Ongoing concerns over China’s post-Covid recovery sapped demand for the risk-sensitive New Zealand Dollar (NZD) yesterday.
Despite Beijing unveiling measures to boost consumer spending, risk appetite remained downbeat, driving NZD lower.
This morning brings the latest inflation reading, which is set to cool to its lowest annual level since Q4 2021. Any surprise results could prompt notable NZD volatility.
Pound (GBP) Strengthens on Elevated Rate Hike Expectations
The Pound (GBP) found renewed strength yesterday as bets that the Bank of England (BoE) will continue its aggressive tightening cycle supported Sterling.
However, lingering concerns over the economic fragility of the UK capped GBP’s gains.
With expectations that headline UK inflation will only modestly cool to 8.2% from 8.7% this evening, the Pound could be buoyed on the prospect of further tightening.
Euro (EUR) Rangebound amid Lack of Data
Unlike the Pound, the Euro (EUR) was struggling for demand yesterday amid a lack of Eurozone economic data.
The negative correlation the Euro shares with the US Dollar (USD) prevented further losses as the latter currency remained under pressure following last week’s selloff.
Tonight will see the release of the Eurozone’s final inflation reading, and unless there is a surprise revision, the Euro could remain moderately supported by rate hike bets from the European Central Bank (ECB).
US Dollar (USD) Undermined by Weaker-than-Expected Retail Sales
Yesterday, the US Dollar continued its uphill struggle to regain its composure after last week’s selloff, as weaker-than-forecast retail sales data stifled USD’s potential.
Against expectations of another 0.5% increase, domestic sales in June only climbed by 0.2% amid waning consumer spending.
Looking forward, market-moving US data is in short supply today. As a result, global risk appetite could drive the safe-haven US Dollar.
Canadian Dollar (CAD) Wavers following Inflation Data
After an initial downside yesterday, the Canadian Dollar (CAD) rose higher amid signs of underlying inflationary pressures. Although headline Canadian inflation cooled rapidly last month, two core measures printed higher than forecast, prompting fresh Bank of Canada (BoC) rate hike bets.
During today’s session, a light data calendar could leave the commodity-linked ‘Loonie’ to trade on oil prices.
Data Releases
Jul 19th 08:45 NZD Inflation Rate QoQ (Q2) 1%
Jul 19th 16:00 GBP Inflation Rate (Jun) 8.2%
Jul 19th 19:00 EUR Inflation Rate (Jun) 5.5%