Australian Dollar (AUD) Rebounds following Disappointing PMIs
The Australian Dollar (AUD) initially came under moderate pressure yesterday when the latest manufacturing and services PMIs printed weaker than expected.
However, the ‘Aussie’ was able to climb higher as the session progressed, although the upside was bumpy. An improving mood aided the riskier AUD, allowing it to capitalise against its weaker rivals.
With no more data out today, the market mood could drive the Australian Dollar. Will a souring mood see AUD slip?
New Zealand Dollar (NZD) Fluctuates amid Mixed Retail Data
The New Zealand Dollar (NZD) also traded erratically against its peers yesterday as a smaller-than-expected decline in retail sales saw the currency fluctuate.
As with AUD, NZD was eventually able to rise against its falling rivals thanks to a slight increase in risk appetite.
Looking ahead, without any data to go by, the New Zealand Dollar will be left to risk appetite. The ‘Kiwi’ could come under pressure if the recent poor PMI data from multiple economies begins to weigh on risk sentiment.
Pound (GBP) Plummets on Mounting Recession Risks
The Pound (GBP) nosedived yesterday in the wake of worse-than-expected PMI data. The crucial services sector contracted for the first time since January.
With soaring borrowing costs and sluggish domestic demand, expectations of another contraction in the UK economy weighed heavily on the Pound.
Turning to today, Sterling could slide even further with the latest distributive trades survey from the Confederation of British Industry (CBI). Economists expect the data to show a sharp decline in retail trade.
Euro (EUR) Pressured by Weak PMIs
The Euro (EUR) also faced selling pressure following dire PMIs yesterday, with overall business activity falling deeper into contraction.
However, a drop in the US Dollar (USD) later in the session lent EUR some much-needed support, thanks to the currencies’ negative correlation.
A lack of data for the day could see the Euro trade on market sentiment. But perhaps more influential will be the negative correlation it shares with the US Dollar (USD) if hints at further tightening are given by the Federal Reserve.
US Dollar (USD) Fluctuates amid PMI Releases
The US Dollar initially shot higher during yesterday’s European session, with the ‘Greenback’ benefitting from the sharp selloffs in GBP and EUR.
USD failed to sustain its upside, however, as America’s own PMI reports printed below expectations.
Turning to this evening, the latest initial jobless claims figure could provide further movement for the US Dollar, while a decline in durable goods orders could dent USD.
Canadian Dollar (CAD) Weakens as Oil Prices Plunge
The commodity-linked Canadian Dollar (CAD) tumbled yesterday after WTI crude prices dropped by more than 1.75% on the day.
Looking ahead for the rest of the day, oil price dynamics will be closely monitored amid a lack of economic data. Could another drop see CAD slip again?
Data Releases
Aug 24th 20:00 GBP CBI Distributive Trades -32
Aug 24th 22:30 USD Durable Goods Orders (Jul) -4%
Aug 24th 22:30 USD Initial Jobless Claims (19/Aug) 240,000