US Dollar slumps as core inflation decelerates

Australian Dollar (AUD) ticks higher amid risk-on trade 

Last Friday, the Australian Dollar (AUD) managed to firm against many of its peers amid cautiously upbeat trade. 

However, market closures due to Australia Day served to limit its upward trajectory, with AUD trimming its gains during the European session. 

During today’s trade, the ‘Aussie’ could remain largely rangebound due to a lack of impactful data. If trading conditions sour, however, AUD may struggle to find support. 

New Zealand Dollar (NZD) undermined by lack of data 

The New Zealand Dollar (NZD) was subdued last Friday, with the ‘Kiwi’ suffering modest losses amid a lack of data and a tepid market mood. 

The ‘Kiwi’ then lost further ground during the European trading hours, as investors opted for other currencies. 

Today, the New Zealand Dollar may endure volatility as investors pore over the latest New Zealand trade data. 

Pound (GBP) propped up by bullish trade 

At the end of the week, the Pound (GBP) firmed against some of its rivals, despite a lack of data catalysts. 

The increasingly risk-sensitive currency was supported by a bullish market impulse, keeping it elevated against safer peers. 

Looking forward, British macroeconomic data is scarce today, which may restrict GBP exchange rates. 

Euro (EUR) rocked by falling German consumer confidence 

The Euro (EUR) saw volatile trade last Friday, as the latest German consumer confidence index missed forecasts. German consumers became more pessimistic heading into February, as the Eurozone’s largest economy continues to struggle. 

However, these losses were offset by weakness in the US Dollar (USD), due to EUR’s negative correlation with USD. 

Today, a light data calendar may leave the common currency listless against its peers. 

US Dollar (USD) slumps as core inflation decelerates 

The safe-haven US Dollar weakened significantly on Friday amid a risk-on market mood and the latest US core PCE price index. 

The Federal Reserve’s preferred inflation gauge cooled more than expected in December, printing at 2.9%. This prompted investors to increase their bets on a March rate cut from the Fed, as inflation approaches its 2% target. 

Owing to a lull in data releases, the US Dollar may struggle to find a clear direction during today’s session. Market risk dynamics could influence USD exchange rates. 

Canadian Dollar (CAD) wavers amid falling oil prices 

The crude-linked Canadian Dollar (CAD) rose against its weaker peers last Friday. A modest uptick in oil prices later in the session lent the currency modest support, with crude ending the week over 4% higher overall. 

Due to minimal data releases today, crude prices may remain the primary driver of movement for the Canadian Dollar.