Australian dollar (AUD) slides following dovish RBA signals
The Australian dollar (AUD) slumped yesterday, trimming its recent gains, after the Reserve Bank of Australia (RBA) left interest rates unchanged at its latest policy meeting.
The RBA also said that rates may have peaked, disappointing some investors who had hoped for a more hawkish message.
With Australian data absent from today’s calendar, risk sentiment could drive the ‘Aussie’.
New Zealand dollar (NZD) flat in absence of data
The New Zealand dollar (NZD) was rangebound yesterday as a lack of domestic data left the ‘kiwi’ without a clear direction.
In addition, a lukewarm market mood kept the risk-sensitive currency trapped in a narrow range.
New Zealand economic data is once again in short supply today. This could leave the ‘kiwi’ to trade on market risk dynamics.
Pound (GBP) wobbles ahead of BoE decision
The pound (GBP) wavered without a clear direction on Tuesday as a lack of UK data left the currency exposed to volatility.
Furthermore, hesitancy ahead of the Bank of England’s (BoE) interest rate decision on Thursday also limited Sterling.
Turning to today, UK economic data is still thin on the ground ahead of the BoE decision. As a result, Sterling may remain subdued.
Euro (EUR) rises as Eurozone retail sales beat forecasts
The euro (EUR) rose yesterday, with the currency shrugging off a decline German factory orders to gain ground against its weaker rivals.
Supporting EUR was an uptick in German exports, as well as a larger-than-forecast recovery in Eurozone retail sales.
More weak data from Germany could dent the common currency later today. German industrial production is forecast to have slumped in March, potentially reinforcing fears around the health of the Eurozone’s largest economy.
US dollar (USD) unclear as risk appetite wavers
The US dollar (USD) initially rose yesterday amid a cautious mood. However, risk appetite grew as the session progressed, dampening USD’s appeal.
Mixed messages from some Federal Reserve officials added to the US dollar’s unclear movement, with markets no wiser on when the Fed might decide to start cutting rates.
Looking ahead, the market mood could drive the safe-haven US dollar today. Any shifts in sentiment could spark USD volatility.
Canadian dollar (CAD) falls as oil prices retreat
The crude-linked Canadian dollar (CAD) fell yesterday, particularly during the US trading hours, as a drop in oil prices dragged the ‘loonie’ lower.
Oil prices may be the driving factor behind CAD movement today. If crude continues to fall, the Canadian dollar may also stumble.
Data Releases
May 8th 16:00 EUR German Industrial Production (Mar) -1.1%