Australian dollar (AUD) ticks lower as inflation holds
Australian inflation unexpectedly held at 3.4% in February, which prompted the Australian dollar (AUD) to waver lower during Wednesday’s session.
Furthermore, iron ore prices fell over the course of the day’s trade, which created further headwinds for the resource-linked ‘Aussie’.
This morning, Australia’s latest retail sales data is due for publication. If consumer spending remained robust in February, AUD could recover its losses.
New Zealand dollar (NZD) wobbles amid variable risk appetite
Wednesday saw the risk-sensitive New Zealand dollar (NZD) trade in a wide range as the market mood continued to shift.
Investors’ appetite for riskier currencies remained in flux over the session, keeping the ‘Kiwi’ on its toes. However, a light data calendar prevented the currency from finding its footing.
Turning to today, NZD could taper off further if New Zealand business confidence deteriorated in March as economists predict.
Pound (GBP) rudderless as data remains scarce
On Wednesday, the pound (GBP) continued its recent run of listless trade, amid a continued absence of data releases.
However, the early risk-on trading conditions kept Sterling underpinned due to its increasingly risk-sensitive nature.
The UK’s finalised GDP print for the fourth quarter of 2023 could impact the pound this evening. As the preliminary reading suggested a technical recession, GBP could weaken if an economic contraction is confirmed.
Euro (EUR) pressured by dovish ECB remarks
Yesterday, dovish comments from European Central Bank (ECB) policymaker Piero Cipollone weighed on the euro (EUR).
During a speech, Cipollone commented that even with an interest rate cut, monetary policy would remain restrictive. By feeding into the existing narrative of imminent policy loosening from the ECB, these remarks dented EUR.
German data could prompt a recovery in the euro later today, if retail sales improved and unemployment remained unchanged as forecast.
US dollar (USD) stabilises as market mood quietens
The US dollar (USD) managed to regain some losses over yesterday’s session, as an initially risk-on market mood softened.
However, due to a lack of domestic data, the ‘greenback’ was unable to strengthen against its peers and ended the day muted.
Initial jobless claims in the US are forecast to have increased in the week ending 23 March, which may weaken USD when published later tonight.
Canadian dollar (CAD) subdued as oil prices grind lower
Crude prices wavered lower on Wednesday, leaving the commodity-sensitive Canadian dollar (CAD) adrift.
Tonight, February’s GDP data is due to print and is expected to show a 0.1% expansion in the Canadian economy, which may boost CAD.
Data releases
Mar 28th 10:00 NZD ANZ Business Confidence (Mar) 34
Mar 28th 10:30 AUD Retail Sales (Feb) 0.4%
Mar 28th 17:00 EUR DE Retail Sales (Feb) 0.3%
Mar 28th 17:00 GBP GDP Growth Rate Final (Q4) -0.3%
Mar 28th 18:55 EUR DE Unemployment Rate (Mar) 5.9%
Mar 28th 22:30 USD Initial Jobless Claims (23/Mar) 215,000
Mar 28th 22:30 CAD GDP (Feb) 0.1%