Euro climbs as Eurozone swerves recession

Australian Dollar (AUD) rocked by retail sales slump

Yesterday, the Australian Dollar (AUD) began the session on weak footing, following a larger-than-forecast drop in retail sales in December.

However, due to elevated risk appetite, the ‘Aussie’ was able to limit its losses.

Reactions to the latest Australian inflation data are likely to drive AUD exchange rates today. Cooling inflation may prompt interest rate cut bets and weaken the ‘Aussie’ against its rivals.

New Zealand Dollar (NZD) supported by bullish market mood

The New Zealand Dollar (NZD) saw wavering trade yesterday, amid a lack of impactful data.

Much like its neighbour, the risk-sensitive ‘Kiwi’ was underpinned by an upbeat market impulse, which supported it against safer assets.

Today, the ‘Kiwi’ may see volatile trade as investors analyse the latest ANZ business confidence data.

Pound (GBP) undermined by IMF warnings

Economic pessimism blighted the Pound (GBP) on Tuesday, following warnings from the International Monetary Fund (IMF).

The IMF warned that economic pressures were likely to negatively impact the UK in years to come, and that a package of tax cuts would worsen this. This bleak outlook served to undermine Sterling.

GBP may continue to remain sidelined today, as focus shifts towards tomorrow’s Bank of England (BoE) interest rate decision.

Euro (EUR) boosted as Eurozone dodges technical recession

Following news that the Eurozone had managed to sidestep a recession last year, the Euro (EUR) began to climb against most peers yesterday.

In the fourth quarter of 2023, the bloc’s economy stagnated, rather than contracting 0.1%. Additionally, on a yearly basis the economy grew by 0.1%, further cheering EUR investors.

Later tonight, Germany’s inflation rate for January is scheduled to print. If it cooled sharply to 3% as forecast, the common currency may weaken.

US Dollar (USD) muted as investors remain focused on Fed decision

Investors remained hesitant ahead of the Federal Reserve’s incoming interest rate decision yesterday, leaving the US Dollar (USD) rangebound.

However, forecast-beating JOLTS job openings data served to support USD later in the session. The number of job vacancies printed at 9.026 million for December, demonstrating a robust labour market.

Today, the ‘Greenback’ may trade in a muted capacity as investors await the Fed rate decision tomorrow. However, if the latest ADP employment figures fall as expected tonight, USD could soften.

Canadian Dollar (CAD) rises as oil prices hold steady

The commodity-sensitive Canadian Dollar (CAD) strengthened yesterday, as crude oil prices held strong following Monday’s decline.

Tonight, the latest suite of Canadian GDP data is due to print. With the country’s economy forecast to have stalled in December, the ‘Loonie’ may weaken.

Data Releases
Jan 31st 10:00    NZD    ANZ Business Confidence (Jan)    30
Jan 31st 10:30    AUD    Inflation Rate (Q4)    4.3%
Jan 31st 23:00    EUR    DE Inflation Rate (Jan)    3%
Jan 31st 23:15    USD    ADP Employment Change (Jan)    145,000
Jan 31st 23:30    CAD    GDP (Dec)    0%