Australian dollar (AUD) climbs in upbeat trade
The risk-sensitive Australian dollar (AUD) rallied to multi-week highs yesterday as a rise in US Federal Reserve interest rate cut bets cheered markets.
In addition, Australia’s final services PMI for March was revised higher, with growth in the sector accelerating to its highest level since April 2022.
This morning, Australia’s latest trade figures are in focus. If they show that the country’s trade surplus narrowed in February, AUD could face headwinds.
New Zealand dollar (NZD) rises amid risk-on mood
The New Zealand dollar (NZD) also strengthened yesterday thanks to the risk-on market mood.
In addition, NZD’s positive correlation to AUD lent the ‘Kiwi’ support.
Turning to today, there’s an ongoing lack of impactful New Zealand data. As a result, risk appetite could drive NZD’s movement.
Pound (GBP) stumbles as services PMI misses forecasts
The pound (GBP) stumbled during yesterday’s European session after the UK’s final services PMI was revised lower.
March’s reading came in at 53.1, marking a faster-than-forecast slowdown in service sector activity.
Sterling could struggle to find a clear direction during today’s trade amid a lack of UK economic data.
Euro (EUR) capped by ECB minutes
The euro (EUR) rose against its weaker peers yesterday after the Eurozone’s final services PMI for March was revised higher, showing a faster-than-expected acceleration in growth.
However, the European Central Bank’s (ECB) latest meeting minutes strengthened the case for a June rate cut, which stifled EUR’s potential.
Later today, mixed data could see EUR exchange rates waver. An expected recovery in German factory orders could later be cancelled out by a decline in Eurozone retail sales.
US dollar (USD) continues to fall as jobless claims rise
The US dollar (USD) extended its downside yesterday as a weaker US services PMI and dovish comments from Federal Reserve Chair Jerome Powell overnight continued to weigh on the ‘greenback’.
USD faced further losses in the evening after the latest initial jobless claims figure rose more than expected.
Looking ahead, tonight brings the latest US non-farm payrolls report. Economists expect US jobs creation to have slowed last month, which could weigh heavily on the US dollar.
Canadian dollar (CAD) unclear amid lack of data
The Canadian dollar (CAD) was mixed yesterday amid a lack of fresh data. CAD slipped against its stronger rivals but a steady rise in oil prices over the week cushioned the crude-linked currency.
Canada’s latest jobless rate is due out tonight. Could an uptick in unemployment put pressure on the ‘loonie’?
Data releases
Apr 5th 10:30 AUD Balance of Trade (Feb) AU$10.4bn
Apr 5th 16:00 EUR German Factory Orders (Feb) 0.8%
Apr 5th 19:00 EUR Retail Sales (Feb) -0.4%
Apr 5th 22:30 CAD Unemployment Rate (Mar) 5.9%
Apr 5th 22:30 USD Non Farm Payrolls (Mar) 200,000