Australian Dollar (AUD) supported by thawing Sino-Australian trade relations
Yesterday, the Australian Dollar (AUD) remained underpinned against its peers amid thawing Sino-Australian trade relations.
Following talks with his counterpart in China, Australian Trade Minister Don Farrell stated he expected remaining wine tariffs to be lifted within weeks. As this would mark the end of previously introduced blockages, AUD investors cheered the news.
The latest monthly consumer price index is due later this morning. If inflation accelerated last month, as forecast, AUD may rise amid delayed interest rate cut expectations.
New Zealand Dollar (NZD) flat ahead of RBNZ decision
With markets remaining focused on the Reserve Bank of New Zealand’s (RBNZ) upcoming interest rate decision, the New Zealand Dollar (NZD) was largely muted yesterday.
The bank is expected to keep rates unchanged at 5.5%, and a recent dovish speech from Governor Adrian Orr has undermined rate hike speculation.
The decision is due later this morning. If the RBNZ presents hawkish forward guidance, the ‘Kiwi’ could rally.
Pound (GBP) muted amid easing UK cost pressures
Tuesday saw the Pound (GBP) waver against its peers amid signs of easing inflationary pressures.
Food and shop price inflation fell during February, with the latter falling to its lowest level since March 2022. This sparked speculation that the Bank of England (BoE) may cut interest rates sooner than expected, undermining Sterling.
As markets await a speech from BoE policymaker Catherine Mann later tonight, GBP may remain directionless. Any hawkish comments from Mann could lift the Pound.
Euro (EUR) undercut by downbeat German outlook
German economic pessimism stifled the Euro (EUR) on Tuesday, following the latest GfK consumer confidence index.
The reading for March did show an improvement, but the overriding consensus is that consumers remain downbeat. With a recovery seeming a long way off for the Eurozone’s largest economy, EUR struggled to attract support.
This evening, the latest Eurozone economic sentiment data is due to print. If the reading shows an improvement as forecast, EUR may gain ground against its peers.
US Dollar (USD) unaffected by durable goods orders slump
Despite a steeper-than-expected plunge in durable goods orders, with January’s reading falling to the lowest levels since 2020, the US Dollar (USD) remained afloat yesterday.
The data was offset by hawkish comments from Federal Reserve officials. Kansas City Fed President Jeffrey Schmid warned against pre-emptive interest rate cuts, providing cushioning for USD.
Later tonight, confirmation of healthy economic growth in the fourth quarter of 2023 may weigh on USD exchange rates.
Canadian Dollar (CAD) wavers despite rising oil prices
The commodity-sensitive Canadian Dollar (CAD) traded in a muted manner on Tuesday, despite renewed attacks in the Red Sea driving oil prices higher.
With Canadian data remaining hard to come by, the crude-linked ‘Loonie’ may trade in tandem with oil prices today.
Data Releases
Feb 28th 10:30 AUD Monthly CPI Indicator (Jan) 3.6%
Feb 28th 11:00 NZD RBNZ Interest Rate Decision 5.5%
Feb 28th 20:00 EUR Economic Sentiment (Feb) 96.7
Feb 28th 23:30 USD GDP Growth Rate (Q4) 3.3%
Feb 29th 01:30 GBP BoE Mann Speech