Australian Dollar (AUD) slides as Chinese deflation woes increase
Thursday saw the Australian Dollar (AUD) struggle to attract support amid news that China’s deflation issue had deepened.
In January, headline inflation printed at -0.8%. This sparked concerns over the superpower’s post-Covid recovery, weighing on AUD due to its stature as a Chinese proxy-currency.
The ‘Aussie’ may see volatile trade today, as markets digest a speech from Reserve Bank of Australia (RBA) Governor Michele Bullock.
New Zealand Dollar (NZD) fluctuates in tandem with shifting risk appetite
Yesterday, the New Zealand Dollar (NZD) weakened during the session as risk appetite waned amongst investors.
Initially, a cheery mood brought about by expectations of increased Chinese economic stimulus allowed NZD to rise. However, as geopolitical tensions increased and the mood deteriorated, the risk-sensitive ‘Kiwi’ retreated.
Macroeconomic data is absent today, which may leave movement in NZD exchange rates tied to market risk appetite.
Pound (GBP) listless despite hawkish BoE comments
The Pound (GBP) traded sideways during yesterday’s session, amid a lack of impactful economic data releases.
However, GBP was able to see some support following a hawkish speech from Bank of England (BoE) policymaker Catherine Mann. In her speech, Mann outlined her reasoning for voting for additional tightening, prompting modest bets on hawkish action.
Data releases are scarce today, which may prompt another session of narrow trade for the Pound.
Euro (EUR) limited by dovish ECB remarks
Mixed trade affected the Euro (EUR) yesterday, amid dovish comments from European Central Bank (ECB) policymakers.
While the ECB’s latest bulletin highlighted why it kept interest rates unchanged, ECB member Hernandez de Cos advocated for a rate cut, undermining EUR.
Due to a light data calendar, the common currency may struggle to find a clear direction today.
US Dollar (USD) boosted by bearish trade
Over the course of Thursday’s session, the US Dollar (USD) gained ground against its rivals as the market mood began to sour.
News that Israel had rejected a proposed ceasefire weighed on risk appetite, bringing safe-haven flows to the ‘Greenback’.
Data releases are set to thin out for the US Dollar today, which may leave it rangebound against its peers.
Canadian Dollar (CAD) supported by oil price rally
Rising oil prices lifted the crude-linked Canadian Dollar (CAD) yesterday, as they rose by over 2% during the session.
The latest Canadian labour data is due tonight. Economists anticipate an increase in the unemployment rate in January, which may weaken CAD.
Data Releases
Feb 9th 23:30 CAD Unemployment Rate (Jan) 5.9%