Australian Dollar (AUD) limited by downbeat market mood
Yesterday, the Australian Dollar (AUD) saw its upside potential limited by a sour market mood despite a firm rebound in retail sales.
In November, sales improved by a surprise 2%. However, analysis revealed this may not be reflective of spending trends in Australia, tempering its impact.
Today, AUD may see volatile trade as investors react to the latest monthly inflation indicator. Could cooling inflation dent the Australian Dollar?
New Zealand Dollar (NZD) pressured by risk-off session
Risk-averse trade undermined the New Zealand Dollar (NZD) on Tuesday, amid a light data calendar.
However, some losses may have been stemmed by robust commodities trade, which cushioned the ‘Kiwi’ against its peers.
New Zealand data remains thin on the ground today, which could lead to subdued trade for the ‘Kiwi’.
Pound (GBP) muted amid lacklustre retail data
The Pound (GBP) saw largely rangebound trade yesterday, following disappointing UK retail data for the festive period.
Sales increased at a significantly slower pace in December this year, indicating weak consumer spending. This prompted renewed Bank of England (BoE) interest rate cut speculation, further pressuring GBP.
Overnight, BoE Governor Andrew Bailey is set to deliver a testimony to the UK Treasury committee. If he successfully pushes back against rate cut bets, GBP could rally.
Euro (EUR) underpinned by falling unemployment
Variable trade struck the Euro (EUR) on Tuesday, following a mixed set of data releases.
German industrial production unexpectedly slumped by 0.7%, initially denting EUR exchange rates. However, this was offset by a fall in the Eurozone’s unemployment rate, which came in at a joint record low of 6.4%.
European Central Bank (ECB) Vice-President Luis de Guindos is due to speak this evening. If he strikes a hawkish tone, EUR could strengthen.
US Dollar (USD) muted by minimal data
The US Dollar (USD) endured listless trade on Tuesday, as market-moving data remained hard to come by.
As such, the safe-haven ‘Greenback’ was unable to capitalise on a downbeat market mood.
Data releases are set to remain scarce today, which may leave the US Dollar without direction.
Canadian Dollar (CAD) boosted by recovering oil prices
Oil prices began to climb yesterday, which allowed the commodity-linked Canadian Dollar (CAD) to shrug off disappointing trade data and strengthen against its peers.
Crude could likely be the core catalyst of movement for the ‘Loonie’ today. If oil prices remain volatile, CAD could waver.
Data Releases
Jan 10th 10:30 AUD Monthly CPI Indicator (Nov) 4.4%
Jan 10th 18:20 EUR ECB Guindos Speech
Jan 11th 01:15 GBP BoE Gov Bailey Speech