Australian Dollar (AUD) muted amid rapid inflation cooldown
Yesterday, the Australian Dollar (AUD) came under pressure following cooler-than-expected inflation data.
In November, inflation cooled below expectations to 4.3%, down from 4.9%. This served to dent expectations of another interest rate hike from the Reserve Bank of Australia (RBA), capping the ‘Aussie’ Dollar’s movements.
Today, AUD may see volatile trade as investors react to the latest trade data. Will an expansion in Australia’s trade surplus boost AUD against its rivals?
New Zealand Dollar (NZD) slips as risk aversion fluctuates
Wavering risk appetite weakened the New Zealand Dollar (NZD) on Wednesday.
With data releases still few and far between, the ‘Kiwi’ softened against its peers as investors looked elsewhere.
New Zealand data remains absent today, which may mute the ‘Kiwi’.
Pound (GBP) flat amid underwhelming BoE testimony
The Pound (GBP) saw largely rangebound trade yesterday, as markets awaited a testimony from Bank of England (BoE) Governor Andrew Bailey.
This proved to be a disappointment, however, as Governor Bailey refrained from commenting on monetary policy. As a result, Sterling remained mostly stagnant towards the end of the European session.
Continued adjustment of BoE interest rate cut bets may be the main catalyst of movement for Sterling today amid an ongoing lack of UK economic data.
Euro (EUR) undercut by muddled ECB messaging
Mixed trade hampered the Euro (EUR) on Wednesday, following a flurry of comments from European Central Bank (ECB) policymakers.
ECB Vice-President Luis de Guindos kicked off proceedings by saying that data suggested the possibility of a technical recession in the bloc in the second half of 2023. However, this was ameliorated by his support for holding interest rates higher for now.
This evening, the ECB is set to publish its latest economic bulletin. If the report appears pessimistic, the common currency could fall.
US Dollar (USD) listless amid lack of data releases
The US Dollar (USD) lacked clear direction yesterday, amid a fluctuating market mood.
Additionally, data remained in short supply which further tempered the ‘Greenback’ against its peers.
Tonight, the latest US inflation data is due to print. Core inflation is expected to cool, which may weaken the ‘Greenback’ despite expectations of increasing headline inflation.
Canadian Dollar (CAD) supported by rising crude prices
Oil prices continued to strengthen yesterday, which cushioned the commodity-linked Canadian Dollar (CAD) from significant losses.
Crude prices may be the primary driver of movement for the ‘Loonie’ again today, amid a lack of other releases.
Data Releases
Jan 11th 10:30 AUD Balance of Trade (Nov) AU$7.5bn
Jan 11th 19:00 EUR ECB Economic Bulletin
Jan 11th 23:30 USD Inflation Rate (Dec) 3.2%