Australian Dollar (AUD) Climbs amid Hopes of Chinese Stimulus Measures
The Australian Dollar (AUD) sustained its upside momentum yesterday, as hopes of additional Chinese economic stimulus boosted the market mood.
As both a proxy for the Chinese economy and a risk-sensitive currency, the ‘Aussie’ pressed its advantage and gained ground over its peers.
Today, investors’ attention will be firmly fixed on the consumer price index release. Could a cooldown in inflation weigh on AUD?
New Zealand Dollar (NZD) Strengthens with Rallying ‘Aussie’
Owing to little in the way of clear data catalysts, the New Zealand Dollar (NZD) strengthened due to its positive correlation to AUD yesterday.
Similarly, hopes for additional Chinese economic stimulus likely brought additional tailwinds due to the countries’ close trading relationship and NZD’s risk-sensitive status.
Over today’s session, the ‘Kiwi’ may trade in tandem with the Australian Dollar due to a light data calendar. Will a drop in AUD drag NZD lower?
Pound (GBP) Mixed amid Risk-On Trade
Due to its increasingly risk-sensitive nature, the Pound (GBP) strengthened against its safer peers on Tuesday but ceded ground against its riskier rivals.
Above-forecast data from the Confederation of British Industry (CBI) may have aided Sterling. Specifically, business confidence for Q3 showed a stronger-than-expected recovery, which cheered GBP investors.
Sterling could face mixed trade again today with UK economic data in short supply.
Euro (EUR) Stumbles as German Outlook Darkens
Falling German business optimism dented the Euro (EUR) during Tuesday’s session.
The key Ifo business climate reading found that German businesses grew more pessimistic over July, as the Eurozone’s largest economy continues to flounder.
Today, the common currency may remain downbeat as investors continue to digest the bloc’s gloomy economic outlook.
US Dollar (USD) Underpinned by Increasing Consumer Optimism
The US Dollar (USD) managed to hold strong against some of its peers yesterday, with the safe-haven currency attracting support despite a risk-on market mood.
An above-forecast increase in consumer confidence levels over July also aided the US Dollar, with American household morale rising more than anticipated.
During today’s trade, the ‘Greenback’ may remain muted as investors anticipate tomorrow’s interest rate decision from the Federal Reserve. Could a cautious tone from the Fed see USD slide?
Canadian Dollar (CAD) Falls as Oil Prices Drop
Due to falling oil prices, the crude-linked Canadian Dollar (CAD) struggled for support during yesterday’s trade.
The ‘Loonie’ may endure further losses today, if oil prices remain depressed.
Data Releases
Jul 26th 11:30 AUD Inflation Rate (Q2) 6.2%