Australian Dollar (AUD) shrugs off lacklustre retail data
Yesterday, the Australian Dollar (AUD) wavered higher, despite retail sales data falling short of expectations.
Sales printed at 1.1% in January, missing forecasts of a 1.5% increase. However, the ‘Aussie’ shrugged the news off, ticking upward against its peers. Despite tapering off later in the session, AUD finished on a high note amid elevated levels of risk appetite.
Fresh data releases are in short supply today, which may leave AUD vulnerable to any shifts in risk appetite.
New Zealand Dollar (NZD) undermined by fading business confidence
New Zealand business confidence fell in February, which bogged down the New Zealand Dollar (NZD) during yesterday’s trade.
ANZ found that confidence unexpectedly deteriorated, as higher inflation and interest rates continue to damage the economy. However, the ‘Kiwi’ was able to reverse its losses later on due to cheery trading conditions.
Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr is due to speak later this morning. Following the RBNZ’s dovish interest rate decision on Wednesday, a hawkish speech is unlikely. Because of this, NZD may soften.
Pound (GBP) listless amid light data calendar
On Thursday, the Pound (GBP) remained rudderless as the UK data lull continued.
However, GBP likely remained underpinned by hawkish commentary from Bank of England (BoE) policymakers throughout the week. On Wednesday, Catherine Mann argued that inflationary pressures remained, prompting investors to re-evaluate rate cut bets.
BoE Chief Economist Huw Pill is due to speak tonight. If he convincingly advocates for restrictive policy, Sterling could rise.
Euro (EUR) tepid amid soft German inflation
The Euro (EUR) struggled to attract support yesterday, following an unexpectedly cool German inflation print.
In February, the headline rate printed at 2.5%, below forecasts of a cooldown to 2.6%. This prompted investors to increase bets on interest rate cuts from the European Central Bank (ECB), limiting EUR.
This evening, the latest Eurozone inflation data is due to print. Cooldowns are expected in both the headline and core readings, which could see EUR slump.
US Dollar (USD) stumbles as core inflation cools
The US core PCE price index for January printed in line with forecasts yesterday, putting pressure on the US Dollar (USD).
The Federal Reserve’s preferred gauge of inflation cooled from 2.9% to 2.8%. This, paired with a larger-than-forecast rise in jobless claims, boosted Fed interest rate cut bets, dampening the ‘Greenback’ against its peers.
Overnight, the ISM manufacturing PMI for February is due for publication. The index is forecast to have improved but remained in contractionary territory, which may stifle USD.
Canadian Dollar (CAD) wavers amid mixed GDP figures
The crude-linked Canadian Dollar (CAD) was volatile yesterday, stumbling at the start of the European session before rebounding as oil prices picked up. Mixed Canadian GDP data in the evening added to the unclear movement.
Canada’s manufacturing PMI for February is due to print tonight. While markets expect the ongoing contraction in the sector to have slowed, CAD may slip if activity remained negative.
Data Releases
Mar 1st 10:00 NZD RBNZ Governor Orr Speech
Mar 1st 20:00 EUR Inflation Rate (Feb) 2.5%
Mar 2nd 00:00 GBP BoE Pill Speech
Mar 2nd 00:30 CAD Manufacturing PMI (Feb) 48.7
Mar 2nd 01:00 USD ISM Manufacturing PMI (Feb) 49.5