Australian Dollar (AUD) Pressured by Stuttering Economy
The Australian Dollar (AUD) came under increased pressure yesterday in the wake of a string of downbeat data releases. Both the final retail sales and services PMI releases confirmed contracting activity.
Meanwhile, a thoroughly risk-off market mood put further pressure on the risk-sensitive ‘Aussie’.
Looking ahead, the latest Statement on Monetary Policy from the Reserve Bank of Australia (RBA) could influence the ‘Aussie’. If the report sets out a dovish vision for the coming months, AUD could slide.
New Zealand Dollar (NZD) Weakened by Downbeat Market Mood
The risk-sensitive New Zealand Dollar (NZD) also struggled for demand as global growth fears weighed heavily on market sentiment.
The recent downgrading of the US government’s credit rating has exacerbated market anxiety, with the risk-off mood persisting through Thursday’s session.
Turning to today, a lack of economic data could leave the risk-sensitive ‘Kiwi’ further exposed to swings in market sentiment. If investors remain downbeat, NZD could fall.
Pound (GBP) Plunges despite BoE Rate Hike
The Pound (GBP) tumbled yesterday in the wake of the Bank of England (BoE) opting to raise interest rates by 25bps.
Despite the hike, the bank’s language took a dovish tilt, with analysts now expecting just one further hike before the BoE concludes its tightening cycle.
A lack of economic data through to the end of the week could see Sterling trade on market sentiment as the market continues to digest the latest interest rate decision.
Euro (EUR) Undermined by Softer-than-Expected PPI
The Euro (EUR) moved mostly sideways yesterday after the latest Eurozone PPI figures showed a sharp decline, dampening interest rate hike bets from the European Central Bank (ECB).
However, the gloomy mood kept EUR afloat against its riskier peers.
Turning to today, a modest recovery in Eurozone retail sales could provide the Euro with a lift. After a stagnation in June, it could mark the first growth in the sector since January.
US Dollar (USD) Wavers amid Weaker-than-Expected Service Sector
The US Dollar (USD) traded in a narrow range yesterday as the latest ISM services PMI slowed more than expected.
The safe-haven ‘Greenback’ was underpinned by the risk-off market mood, however, which kept the currency cushioned.
Turning to today, the non-farm payrolls report is in focus. If it mirrors the earlier ADP data and beats forecasts, USD could surge higher.
Canadian Dollar (CAD) Supported by Rebounding Oil Prices
The commodity-linked Canadian Dollar (CAD) remained fairly supported by recovering WTI oil prices yesterday after Saudi Arabia announced an extension to voluntary production cuts.
Looking ahead, an uptick in the latest jobless rate could weigh on the ‘Loonie’ if forecasts prove true. Additionally, oil price dynamics will likely continue to influence the Canadian Dollar.
Data Releases
Aug 4th 11:30 AUD RBA Statement on Monetary Policy
Aug 4th 19:00 EUR Retail Sales MoM (Jun) 0.2%
Aug 4th 22:30 CAD Unemployment Rate (Jul) 5.5%
Aug 4th 22:30 USD Unemployment Rate (Jul) 3.6%
Aug 4th 22:30 USD Non-Farm Payrolls (Jul) 200,000