Australian dollar (AUD) strengthens amid robust private sector data
Tuesday saw the Australian dollar (AUD) strengthen following a robust slate of preliminary PMI readings.
While the service sector edged lower, it still beat forecasts. Meanwhile, manufacturing improved notably, and overall business activity accelerated.
Later this morning, Australia’s inflation data for the first quarter of 2024 is due to print. If the headline rate cools as forecast, renewed Reserve Bank of Australia (RBA) interest rate cut bets could weaken AUD.
New Zealand dollar (NZD) flat amid lack of data
Despite spells of upbeat trade, the risk-sensitive New Zealand dollar (NZD) remained largely muted over the course of Tuesday’s session.
This was likely due to a light data calendar, which left investors with little reason to support NZD. Furthermore, recent strength likely prompted some profit-taking, leaving the ‘kiwi’ to trim its gains.
The New Zealand dollar may endure volatile trade today, as investors deliberate over the latest domestic trade data.
Pound (GBP) rises as BoE’s Pill pushes against imminent rate cuts
The pound (GBP) rallied on Tuesday, following hawkish remarks from Bank of England (BoE) Chief Economist Huw Pill.
During a speech, Pill discussed the risks around cutting interest rates too early, and suggested that the UK economy was returning to growth. This was reinforced by forecast-beating preliminary PMIs released earlier in the session, leading to a recovery in Sterling.
Today, the pound could trade without a clear direction due to a relative absence of market-moving data releases.
Euro (EUR) firms following PMI data
Yesterday, the Eurozone’s preliminary PMI releases lent the euro (EUR) support against its rivals.
However, while the service sector beat forecasts and showed increasing activity, the common currency was unable to fully press the advantage. This was due to the Eurozone’s manufacturing sector shrinking further, leading to a muddled economic outlook.
Looking ahead, Germany’s latest Ifo business climate data is due to print this evening. If this shows another improvement, the euro could gain ground against its peers.
US dollar (USD) loses out as PMIs disappoint
On Tuesday, the safe-haven US dollar (USD) weakened amid an initial lack of data and cheery trade.
The ‘greenback’ then faced steeper losses later in the session after the US PMIs for April pointed to an unexpected slowdown in American private sector growth.
Tonight, the latest US durable goods orders figure is due to print. If orders rose by 2.5% in March, as forecast, the ‘greenback’ could regain its previous advantage.
Canadian dollar (CAD) dips as oil prices continue falling
Oil prices continued to slide on Tuesday, which served to weaken the crude-linked Canadian dollar (CAD) against its peers.
Tonight, Canada’s retail sales for February could enable the ‘loonie’ to recover if they improved as forecast.