Australian Dollar (AUD) Crumbles on Chinese Growth Fears
The risk-sensitive Australian Dollar (AUD) tumbled yesterday as fears over China’s economic recovery weighed on risk sentiment.
This created additional headwinds for the ‘Aussie’, as AUD often trades as a proxy currency for the Chinese economy.
The latest employment data could provide modest support if signs continue to point to a tight labour market. Although job growth is predicted to slow, the unemployment rate is set to remain near historic lows which could boost Reserve Bank of Australia (RBA) rate hike bets.
New Zealand Dollar (NZD) Tumbles on Souring Market Sentiment
The latest quarterly inflation data came in hotter than expected and initially sent the New Zealand Dollar (NZD) higher yesterday.
However, lingering concerns over China’s economic growth quickly pulled NZD lower, due to the currency’s risk-sensitive nature.
Turning to today, a lack of data could see the New Zealand Dollar continue to trade on market sentiment. If the mood doesn’t pick up, the ‘Kiwi’ could stumble further.
Pound (GBP) Slumps on Slashed Rate Hike Bets
The Pound (GBP) tumbled yesterday as inflation softened further than expected, cooling from 8.7% to 7.9%.
Interest rate hike bets were significantly pared back as the Bank of England (BoE) could now ease up on aggressive tightening.
Sterling could remain subdued today amid a lack of UK economic data. Will a continued pullback in BoE bets keep the Pound under pressure?
Euro (EUR) Underpinned by Surprise Core Inflation Jump
The Euro (EUR) continued to trade sideways yesterday as the final Eurozone headline inflation rate was confirmed at 5.5%.
However, core inflation climbed above estimates to 5.5%, supporting further tightening from the European Central Bank (ECB) and cushioning EUR from losses.
Amid a lack of more notable data, Germany’s latest PPI release could drive EUR movement today. Will another decline in German wholesale inflation dent both ECB bets and the Euro?
US Dollar (USD) Recovers amid Souring Market Mood
Yesterday, the US Dollar (USD) found renewed support, despite a lack of economic data, as a souring market mood buoyed the safe-haven currency.
Although the mood improved during European trade, USD sustained its modest upside momentum, with the ‘Greenback’ seemingly benefitting from the sharp selloff in the Pound.
Turning to today, the latest jobless claims figure could aid the ‘Greenback’. Despite an expected uptick, the overall picture still highlights a tight labour market, which could provide the US Dollar with support.
Canadian Dollar (CAD) Supported by Stabilising Oil Prices
The Canadian Dollar (CAD) was left to trade on oil price dynamics yesterday amid a lack of data. With WTI crude oil prices appearing to stabilise above $75 a barrel, the ‘Loonie’ was moderately supported.
Turning to today, a lack of Canadian data could see CAD continue to trade on oil price dynamics. Will ongoing strength in oil lend the ‘Loonie’ support?
Data Releases
Jul 20th 11:30 AUD Unemployment Rate (Jun) 3.6%
Jul 20th 16:00 EUR DE PPI (Jun) -0.4%
Jul 20th 22:30 USD Initial Jobless Claims (15/Jul) 242,000