Australian Dollar (AUD) hits monthly lows amid risk aversion
The Australian Dollar (AUD) tumbled to one-month lows yesterday following an unexpected drop in consumer confidence in January.
An anxious market mood added to the risk-sensitive currency’s woes, amid a new escalation in the Middle East crisis.
Risk appetite could continue to drive the Australian Dollar today. If geopolitical tensions continue to rise, AUD may struggle. Chinese GDP data could also impact the ‘Aussie’, with any signs of weakness potentially weighing on the currency.
New Zealand Dollar (NZD) weakens as sentiment sours
The New Zealand Dollar (NZD) also fell to monthly lows yesterday, with the bearish market mood dampening demand for the risky ‘Kiwi’.
As the crisis in the Middle East deteriorated, investors shunned riskier assets in search of safer investments.
Turning to today, market sentiment may remain the key factor influencing the New Zealand Dollar. Ongoing worries could keep NZD subdued.
Pound (GBP) muted as UK wage growth slows
The Pound (GBP) was mixed yesterday, as the risk-off mood saw Sterling slip against its safer rivals but tick higher elsewhere.
GBP then came under pressure during the European trading hours, as a cooldown in UK wage growth boosted bets on a coming interest rate cut from the Bank of England (BoE).
This evening, all eyes will be on the UK’s latest consumer price index. Any signs that British inflation is continuing to cool could weigh on Sterling.
Euro (EUR) slips despite positive German data
The Euro (EUR) stumbled yesterday, despite an unexpected rise in Germany’s economic sentiment index for January.
A larger-than-forecast decline in Eurozone consumer inflation expectations may have weighed on EUR. The currency also suffered from its negative correlation with a stronger US Dollar (USD).
The Eurozone’s final inflation rate for December could lend EUR modest support this evening, if it confirms that price pressures ticked higher last month.
US Dollar (USD) strengthens amid risk-off mood
The US Dollar rallied yesterday as investors flocked to the safe-haven currency amid widespread risk aversion.
An uptick in US Treasury yields also boosted the American currency, as markets reined in bets on an aggressive interest rate cutting cycle from the Federal Reserve.
Tonight, US retail sales for December could impact the ‘Greenback’. Will an acceleration in domestic sales growth boost USD?
Canadian Dollar (CAD) firms on USD correlation
The Canadian Dollar (CAD) firmed yesterday, with the ‘Loonie’ enjoying its positive correlation to the US Dollar. However, mixed Canadian inflation data seemed to cap the upside.
Today, CAD could continue to trade true to its correlation with USD amid a lack of data. Oil price dynamics could also influence the commodity-linked currency.
Data Releases
Jan 17th 17:00 GBP Inflation Rate (Dec) 3.8%
Jan 17th 20:00 EUR Inflation Rate (Dec) 2.9%
Jan 17th 23:30 USD Retail Sales (Dec) 0.4%