Australian Dollar (AUD) loses out as market mood sours
On Monday, the Australian Dollar (AUD) began the session on unsteady ground, amid mixed economic data. Cooling inflation negated any gains from a better-than-expected service sector PMI.
However, the market mood progressively soured over Monday’s session, weakening the ‘Aussie’ against safer peers.
This afternoon, the Reserve Bank of Australia (RBA) is due to deliver its latest interest rate decision. The RBA is expected to leave rates unchanged, but any indication of coming rate cuts could hamper AUD.
New Zealand Dollar (NZD) reverses course amid bearish trade
The New Zealand Dollar (NZD) weakened on Monday, as risk appetite faded over the session.
While the ‘Kiwi’ began the day gaining ground against its peers, the risk-sensitive currency reversed its gains as bearish trade took root.
Data looks set to remain in short supply today, which could leave the ‘Kiwi’ to trade on risk appetite.
Pound (GBP) slides despite service sector growth
The Pound (GBP) weakened against its stronger peers on Monday, despite a larger-than-expected improvement in the UK’s January services PMI.
The PMI release also showed signs that UK inflation is easing, which seemed to stoke Bank of England (BoE) rate cut bets and put some pressure on the Pound.
Owing to a light data calendar, the Pound may struggle to find support from investors during today’s trade.
Euro (EUR) zigzags despite downbeat German trade figures
The Euro (EUR) seesawed yesterday, as dismal German trade data initially pressured the common currency.
Exports from the Eurozone’s largest economy fell to a near two-year low in December amid decreased American demand. However, the Euro’s safer stature allowed it to recover against some currencies over the day’s trade.
Volatile trade could strike the Euro today amid a duo of impactful data releases. Between stagnant German factory orders and falling Eurozone retail sales, EUR may weaken.
US Dollar (USD) soars as Fed cut bets dissipate
On Monday, the US Dollar (EUR) rocketed higher following hawkish comments from Federal Reserve Chair Jerome Powell over the weekend. Powell reiterated that a March rate cut was highly unlikely.
The latest ISM services PMI brought additional strength, as it eclipsed forecasts and provided evidence of robust business activity.
Data releases are thin on the ground for USD today, which may leave it to trade on risk appetite. Bearish trade could lift the US Dollar.
Canadian Dollar (CAD) rises in tandem with US Dollar
The Canadian Dollar (CAD) strengthened on Monday, due to its close ties to a rallying US Dollar. However, falling oil prices may have capped CAD’s gains somewhat.
Canada’s latest Ivey PMI for January is due tonight. Private sector activity is forecast to have slowed, which may weaken the ‘Loonie’ against its peers.
Feb 6th 13:30 AUD RBA Interest Rate Decision 4.35%
Feb 6th 17:00 EUR DE Factory Orders (Dec) 0%
Feb 6th 20:00 EUR Retail Sales (Dec) -1%
Feb 7th 01:00 CAD Ivey PMI (Jan) 55.8