Australian Dollar (AUD) Drops amid Inflation Cooldown
The Australian Dollar (AUD) fell sharply yesterday, following the latest consumer price index. Inflation fell over Q2 to 6%, below forecasts of 6.2%, leading to investors pulling back bets on further tightening from the Reserve Bank of Australia (RBA).
Similarly, analysis suggested that the RBA could have moved into overtightening territory, further dampening bets on more interest rate hikes.
Today, a lack of notable Australian data could leave the risk-sensitive ‘Aussie’ to trade on risk appetite.
New Zealand Dollar (NZD) Diminished by Risk-Off Trade
Due to a short supply of data, the New Zealand Dollar (NZD) was left vulnerable to the sombre market mood yesterday.
As a highly risk-sensitive currency, the ‘Kiwi’ was unable to garner much support as a cautious tone characterised the day’s trade.
Over today’s session, the ‘Kiwi’ may trade in tandem with the Australian Dollar due to an absence of data.
Pound (GBP) Rises despite Lack of Data
In spite of a lack of economic data yesterday, the Pound (GBP) managed to march higher against some of its peers.
The upside seemed to come as Bank of England (BoE) interest rate rise bets picked up ahead of the policy decisions from the European and US central banks.
Coming up, the Confederation of British Industry (CBI) is forecast to indicate an improvement in the UK retail sector this evening, which could aid GBP.
Euro (EUR) Muted Ahead of ECB Decision
Muted trade struck the Euro (EUR) yesterday, as EUR investors grew cautious ahead of the European Central Bank (ECB) and Federal Reserve interest rate decisions.
Amid uncertainty over what tone the banks would take in their forward guidance, traders were hesitant to place any aggressive bets on the single currency.
Tonight, the ECB takes the stage with their policy decision. Will hawkish forward guidance boost EUR?
US Dollar (USD) Wavers as Investors Await Fed Decision
The US Dollar (USD) saw wavering trade yesterday in the build up to the Federal Reserve’s interest rate decision.
Markets were unsure whether the Fed would stick to its previously hawkish messaging or change its tune after recent indications of easing inflation and a cooling labour market.
The ‘Greenback’ may see ongoing volatility this morning as investors digest the decision. Looking further ahead, the US GDP results due out this evening could prompt fresh movement.
Canadian Dollar (CAD) Falls as Oil Prices Drop
The crude-linked Canadian Dollar (CAD) was undercut by a drop in oil prices yesterday.
The ‘Loonie’ may see choppy trade today, as investors pore over the Bank of Canada’s (BoC) recent meeting minutes.
Data Releases
Jul 27th 16:00 EUR GfK Consumer Confidence (Aug) -24.7
Jul 27th 20:00 GBP CBI Distributive Trades (Jul) -2
Jul 27th 22:15 EUR ECB Interest Rate Decision 4.25%
Jul 27th 22:30 USD GDP Growth Rate (Q2) 1.8%