Australian Dollar (AUD) Undermined by Global Growth Headwinds
The Australian Dollar (AUD) struggled for demand at the end of the week amid a lack of economic data and a gloomy mood.
Concerns over China’s economic recovery and simmering Sino-American tensions led to global growth fears, weighing on risk appetite.
Looking ahead, downbeat PMIs could dent the Australian Dollar even further if they print true to forecasts. The service sector is predicted to fall into contractionary territory for the first time since March.
New Zealand Dollar (NZD) Slips on Downbeat Market Mood
Likewise, the New Zealand Dollar (NZD) was left exposed to market sentiment on Friday amid a thin trading calendar.
A downturn in market sentiment sapped demand for riskier currencies such as the ‘Kiwi’ amid global economic fears and the prospect of more US interest rate rises.
Turning to today, the latest trade balance could show the New Zealand economy experienced the first trade deficit in two months in June. Could weaker trade data dent NZD?
Pound (GBP) Mixed despite Strong Retail Sales
The Pound (GBP) initially found some modest support from better-than-expected retail sales on Friday. Against expectations of a small 0.2% climb, sales in June grew 0.7%.
However, Sterling was unable to hold firm against its stronger rivals as concerns linger about soaring interest rates and a looming recession.
This evening sees the latest flash PMIs released. Could continued signs of an economic slowdown see Sterling fall?
Euro (EUR) Capped by Stronger USD
The Euro (EUR) continued to trade listlessly amid a lack of major economic data on Friday, although a downbeat market mood saw it firm against its riskier rivals.
Also capping EUR’s upside was the currency’s negative correlation with the US Dollar (USD), with the Euro coming under pressure as USD surged.
Turning to today, the latest PMI figures could drag the Euro lower if forecasts prove accurate. Concerns over the Euro area economy could sap demand.
US Dollar (USD) Supported by Cautious Market Mood
The US Dollar (USD) continued to enjoy a strong rebound in demand on Friday as elevated rate hike bets from the Federal Reserve were joined with a cautious market mood.
Safe-haven flows propped up the ‘Greenback’, with the USD rebound extending into the weekend.
Downbeat PMIs released today could see the US Dollar slip. However, if weak data from multiple countries sours the market mood, the safer ‘Greenback’ could gain ground.
Canadian Dollar (CAD) Undermined by Disappointing Retail Sales
The Canadian Dollar (CAD) slipped at the end of the week as the latest retail sales figures missed expectations. Sales only grew 0.2%, against predictions of 0.5% growth.
Looking ahead, the crude-linked Canadian Dollar could rely on oil price dynamics amid a lack of economic data. Could ongoing strength in oil lift the ‘Loonie’ today?
Data Releases
Jul 24th 08:45 NZD Balance of Trade (Jun) NZ$-1bn
Jul 24th 09:00 AUD Manufacturing PMI Flash (Jul) 47.6
Jul 24th 09:00 AUD Services PMI Flash (Jul) 49.2
Jul 24th 18:00 EUR Manufacturing PMI Flash (Jul) 43.5
Jul 24th 18:00 EUR Services PMI Flash (Jul) 51.5
Jul 24th 18:30 GBP Manufacturing PMI Flash (Jul) 46.1
Jul 24th 18:30 GBP Services PMI Flash (Jul) 53
Jul 24th 23:45 USD Manufacturing PMI Flash (Jul) 46.4
Jul 24th 23:45 USD Services PMI Flash (Jul) 54.1