Australian Dollar (AUD) carried by upbeat trade
Wednesday saw the Australian Dollar (AUD) strengthen, as a bullish market impulse carried it above safer peers.
However, dovish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock may have capped its gains. Bullock stated that the RBA may opt to cut interest rates before inflation reaches 2.5%, sparking bets on imminent policy loosening.
The ‘Aussie’ may see volatile trade today, if Australian unemployment increased in January as forecast.
New Zealand Dollar (NZD) rallies as RBNZ rate cut bets recede
Fading interest rate cut bets boosted the New Zealand Dollar (NZD) yesterday, alongside risk-on trade.
Despite cooling food inflation, analysts began to push back the expected start date of rate cuts from the Reserve Bank of New Zealand (RBNZ). August is now the expected beginning point, with the shifted timeline benefitting the ‘Kiwi’.
New Zealand macroeconomic data is absent today, which may leave the ‘Kiwi’ exposed to changes in the market mood.
Pound (GBP) crumbles as inflation prints beneath expectations
The latest UK inflation data printed below forecasts yesterday, prompting the Pound (GBP) to slump against its rivals.
Both core and headline inflation rates remained unchanged in January, printing below the expected increase. This prompted elevated Bank of England (BoE) rate cut bets, further weakening GBP.
This evening, the latest UK GDP data is due to print. If it confirms that the country fell into a technical recession at the end of 2023, the Pound may slide.
Euro (EUR) unmoved by upbeat industrial production data
The Euro (EUR) wavered yesterday, as its safer stature prevented it from capitalising on robust economic data.
The second estimate of the Eurozone’s fourth-quarter GDP growth rate showed that the bloc managed to sidestep a recession. Although industrial production shot up unexpectedly across the bloc, risk-on trade limited the common currency’s upside.
This evening, European Central Bank (ECB) President Christine Lagarde is set to deliver a speech. If she pushes back against existing rate cut bets, the Euro could rally.
US Dollar (USD) tepid amid lack of data
Wednesday saw the US Dollar (USD) struggle to find its footing, amid a lack of impactful data releases.
As such, the safe-haven ‘Greenback’ was left exposed to the cheery trading conditions, limiting its movement. However, waning Federal Reserve rate cut bets may have underpinned USD against its peers.
January’s retail sales data is due for release tonight, and is expected to show a fall in sales on a monthly basis. Could signs of slowing consumer spending soften USD?
Canadian Dollar (CAD) bolstered by climbing crude prices
The crude-sensitive Canadian Dollar (CAD) was supported during yesterday’s session by rising oil prices, prompted by continued geopolitical tensions.
Oil prices look set to remain the core catalyst of movement for the ‘Loonie’ today. If prices continue to increase, CAD may strengthen in tandem.
Data Releases
Feb 15th 10:30 AUD Unemployment Rate (Jan) 4%
Feb 15th 17:00 GBP GDP Growth Rate (Q4) -0.1%
Feb 15th 18:00 EUR ECB President Lagarde Speech
Feb 15th 23:30 USD Retail Sales (Jan) -0.1%