Australian Dollar (AUD) Buoyed by Stronger-than-Expected Employment Data
The Australian Dollar (AUD) leapt higher yesterday after the latest jobs data highlighted a persistently tight labour market, which bolstered interest rate hike bets from the Reserve Bank of Australia (RBA).
However, a souring market mood saw the risk-sensitive ‘Aussie’ trim its gains at the end of the European session.
With a darkening global market sentiment, the Australian Dollar could come under pressure amid a lack of economic data today. Escalating geopolitical tensions between the US and China could dent the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Pressured by Simmering Geopolitical Tensions
After an initial upside, the New Zealand Dollar (NZD) then suffered intense selling pressure as a lack of data left it exposed to waning market sentiment.
Tensions are simmering between the US and China after the latter warned of retaliations to sanctions and export controls imposed by the US.
Turning to today, without major economic data, the ‘Kiwi’ could be further pressured by market dynamics. Concerns over global growth and geopolitical tensions could weaken the New Zealand Dollar.
Pound (GBP) Subdued Ahead of Retail Sales Data
Thursday saw the Pound (GBP) continue to struggle for support after softening inflation on Wednesday pared Bank of England (BoE) rate hike bets.
With a fairly cautious market mood, and growing concerns surrounding the UK economy, GBP investors appeared to be holding back until the latest retail sales data was released.
Today could see the Pound strengthen if retail sales match expectations. Predictions of a 0.2% increase in June could mark the second consecutive month of growth, potentially boosting Sterling.
Euro (EUR) Undermined by USD Correlation
Yesterday, the Euro (EUR) failed to maintain support from elevated rate hike expectations amid its negative correlation with the surging US Dollar (USD).
Cushioning the downside, however, was improving consumer confidence in the Eurozone. The flash reading showed sentiment in the bloc improved to its highest level since February 2022.
Looking ahead, a thin trading calendar could leave the Euro trading on market mood and its relationship with the US Dollar. The single currency could end the week subdued.
US Dollar (USD) Rallies on Stubbornly Tight Labour Market
The US Dollar strengthened substantially against its rivals yesterday in the wake of stronger-than-expected jobless claims.
With the number of Americans filing for unemployment unexpectedly falling, USD investors were buoyed by increased Federal Reserve rate hike bets.
Turning to today, the safe-haven US Dollar could remain supported if market sentiment remains risk averse.
Canadian Dollar (CAD) Buoyed by Rising Oil Prices
Amid a lack of economic data yesterday, the Canadian Dollar (CAD) found support as WTI crude prices continued to hold strong.
With oil prices comfortably above $75 a barrel, despite a cautious market mood, the ‘Loonie’ was kept afloat.
Tonight, Canada’s latest retail sales data is due out. Will a sharp slowdown in sales growth dent CAD? Or will the 0.5% rise forecast be enough to lend the ‘Loonie’ support?
Data Releases
Jul 21st 16:00 GBP Retail Sales (Jun) 0.2%
Jul 21st 22:30 CAD Retail Sales (May) 0.5%