Australian Dollar (AUD) continues to slide as mood darkens
The Australian Dollar (AUD) fell to fresh lows yesterday, striking its worst level in two months against the US Dollar (USD), as another escalation in the Middle East further soured the market mood.
In addition, some disappointing data from China left the ‘Aussie’ lacking support. Chinese GDP and retail sales both missed forecasts.
Turning to today, Australia’s latest jobs report is in focus. Further employment growth could support AUD exchange rates.
New Zealand Dollar (NZD) falls as markets remain fearful
The New Zealand Dollar (NZD) also dropped to new multi-week lows on Wednesday, with the risk-sensitive ‘Kiwi’ losing support as markets clouded over.
With the Middle East crisis deteriorating, investors are deeply concerned about global instability and disruption to trade through the Red Sea.
As today’s session unfolds, risk dynamics could continue to drive NZD. Will an increasingly troubling global outlook drag the New Zealand Dollar even lower?
Pound (GBP) jumps after UK inflation accelerates
Having softened during the day, the Pound (GBP) then leapt higher yesterday evening as the UK’s latest consumer price index beat forecasts.
UK headline inflation unexpectedly ticked higher in December. This saw markets scale back bets on interest rate cuts from the Bank of England (BoE).
Looking forward, UK economic data is in short supply today. As a result, Sterling could see mixed movement.
Euro (EUR) firms amid risk aversion
The Euro (EUR) rose against its weaker peers yesterday.
Confirmation that Eurozone inflation accelerated last month and the prevailing risk-off market mood both supported EUR.
However, the single currency’s upside was limited due to its strong negative correlation with USD.
Tonight, the European Central Bank (ECB) will release the minutes from its December policy meeting. Could a hawkish tone from the bank boost the Euro?
US Dollar (USD) strikes five-week high as sales beat forecasts
The safe-haven US Dollar continued to march higher yesterday, hitting a five-week high, amid the increasingly anxious tone characterising trade.
US retail sales data also lent the ‘Greenback’ some support, as domestic sales growth accelerated more than forecast in December.
Risk appetite could continue to drive the US Dollar until this evening, when the latest initial jobless claims figure is due out. If new unemployment benefit claims remained low last week, USD could climb.
Canadian Dollar (CAD) dragged lower as oil falls
The crude-linked Canadian Dollar (CAD) fell against its stronger rivals yesterday amid a decline in oil prices. However, CAD still managed to climb against AUD and NZD.
Crude prices could continue to drive the ‘Loonie’ today. If prices continue to weaken, the Canadian Dollar may slide.
Data Releases
Jan 18th 10:30 AUD Unemployment Rate (Dec) 3.9%
Jan 18th 22:30 EUR ECB Monetary Policy Meeting Accounts
Jan 18th 23:30 USD Initial Jobless Claims (13/Jan) 207,000