Australian Dollar (AUD) undermined by bleak Chinese outlook
Yesterday, the Australian Dollar (AUD) wavered lower, despite the final services PMI for February marking a return to growth.
AUD’s weakness was likely due to ongoing pessimism around China’s economic outlook. Due to the ‘Aussie’ Dollar’s nature as a Chinese proxy currency, indications of slowing private sector activity push it lower.
Australia’s GDP data for the fourth quarter of 2023 is due to print later this morning. Could a 0.3% expansion lift the ‘Aussie’ against its rivals?
New Zealand Dollar (NZD) adrift amid variable market mood
Impactful releases were in short supply yesterday, which prevented the New Zealand Dollar (NZD) from finding its footing.
This left the risk-sensitive ‘Kiwi’ exposed to the market mood. NZD slipped during the daytime session before recouping some losses overnight.
Data releases remain thin on the ground today, which could see the ‘Kiwi’ trade in a narrow range.
Pound (GBP) rudderless amid mixed economic data
On Tuesday, the Pound (GBP) was unable to find a clear direction due to mixed economic data releases.
While the UK’s final services PMI still pointed to a strong expansion in the vital sector, it came in lower than the preliminary estimate, revealing a slowdown in activity.
UK Chancellor Jeremy Hunt is due to unveil his Spring Budget tonight. If rumoured tax cuts rattle markets amid fears of unfunded spending commitments, the Pound could struggle.
Euro (EUR) listless amid light data calendar
The Euro (EUR) struggled through yesterday’s trade, due to a lull in impactful data releases.
However, February’s final services PMI was revised upward, marking the first expansion in the sector for seven months. This likely served to keep the common currency afloat over the session.
This evening, the latest German trade data is due to print. Economists anticipate the country’s trade surplus will have shrunk in January as imports outweighed exports, which may weaken EUR.
US Dollar (USD) dented by underwhelming services PMI
Following a disappointing ISM services PMI release, the US Dollar (USD) came under selling pressure on Tuesday.
The index printed below forecasts at 52.6, showing slowing growth. The slowdown was predominantly driven by a contraction in the employment index, sparking concerns about the US labour market and further undermining USD.
Overnight, Federal Reserve Chair Jerome Powell is due to begin his testimony to the US Congress. He is likely to come under pressure to provide a more specific timeline for interest rate cuts, which may prompt USD to slump.
Canadian Dollar (CAD) pressured by falling oil prices
The crude-linked Canadian Dollar (CAD) endured rangebound trade yesterday, as oil prices fell by almost half a percent.
The Bank of Canada (BoC) is set to publish its latest interest rate decision overnight. While a hold is expected, dovish forward guidance may weaken the ‘Loonie’ against its peers.
Data Releases
Mar 6th 10:30 AUD GDP Growth Rate (Q4) 0.3%
Mar 6th 17:00 EUR DE Balance of Trade (Jan) €21.5bn
Mar 6th 22:30 GBP Spring Budget
Mar 7th 00:45 CAD BoC Interest Rate Decision 5%
Mar 7th 01:00 USD Fed Chair Powell Testimony
Mar 7th 01:00 USD JOLTs Job Openings (Jan) 8.9m