Australian dollar (AUD) extends post-RBA losses
The Australian dollar (AUD) continued to trend lower yesterday as the Reserve Bank of Australia’s (RBA) less hawkish stance following Tuesday’s interest rate decision applied pressure to the ‘Aussie’.
In addition, a cautious market mood dampened the risk-sensitive currency’s appeal.
With Australian data releases in short supply today, risk sentiment could influence the ‘Aussie’. Will ongoing worries about the Middle East crisis sap demand for AUD?
New Zealand dollar (NZD) flat amid quiet trading conditions
The New Zealand dollar (NZD) struggled to attract support yesterday. With no domestic data due out and very little appetite for riskier assets, NZD was stuck in a narrow range.
Turning to today, the continued absence of any notable New Zealand economic data could leave the ‘kiwi’ to trade on market risk appetite.
Pound (GBP) softens ahead of BoE decision
The pound (GBP) fell against many of its peers yesterday, striking a two-week low against the euro (EUR), as a gloomy mood weighed on the increasingly risk-sensitive currency.
Furthermore, investors seemed unwilling to support Sterling ahead of the Bank of England’s (BoE) upcoming interest rate decision.
Looking ahead, the spotlight is undoubtedly on the BoE’s policy announcement tonight. While the bank is expected to leave rates unchanged, any indication that a rate cut is on the horizon could weigh on Sterling.
Euro (EUR) firms despite poor German data
The euro enjoyed support during yesterday’s session, as EUR investors brushed off a contraction in German industrial production.
Output in the Eurozone’s largest economy shrank by 0.4% in March. However, this was not as bad as the expected 0.6% decline. Additionally, a risk-off mood supported the safer euro.
Eurozone data is thin on the ground today. Therefore, the common currency could struggle to find a clear direction.
US dollar (USD) firms amid market anxiety
The US dollar (USD) inched higher on Wednesday as a risk-off market mood provided the ‘greenback’ with safe-haven flows.
An uptick in US Treasury yields also lent the American currency modest support.
The latest initial jobless claims figure, due out tonight, is the focus for USD investors in the session ahead. Could an uptick in unemployment benefit claims dent the ‘greenback’?
Canadian dollar (CAD) wavers amid choppy oil prices
The crude-linked Canadian dollar (CAD) traded in line with oil prices yesterday, initially trending lower as oil prices fell before recouping some losses during US trading hours.
Oil prices could continue to impact the ‘loonie’ today in the absence of any new Canadian data. If crude extends its recent downside, CAD could weaken in tandem.
Data Releases
May 9th 21:00 GBP BoE Interest Rate Decision 5.25%
May 9th 22:30 USD Initial Jobless Claims (04/May) 210,000
May 9th 23:15 GBP BoE Gov Bailey Speech