Australian dollar (AUD) rises amid improving market mood
On Monday, the Australian dollar (AUD) stumbled out of the gate following a worse-than-expected Australian business confidence index.
The index for April printed at 1, beneath the expected reading of 2, due to weak morale in the retail sector. However, as risk appetite rose during the session, the ‘Aussie’ managed to climb against its peers.
Risk appetite is likely to be the main driver of movement for AUD again today amid a lack of domestic data. If conditions remain upbeat, the ‘Aussie’ could strengthen further.
New Zealand dollar (NZD) recovers following weak service sector data
Following a downbeat service sector index, the New Zealand dollar (NZD) began yesterday on poor footing.
However, the ‘kiwi’ managed to regain ground against its peers due to a steadily increasing level of risk appetite across markets.
Market sentiment could continue to drive NZD exchange rates today, amid a lack of impactful data releases.
Pound (GBP) supported by optimistic economic analysis
The pound (GBP) began to rise over the course of Monday’s session, in the wake of an optimistic analysis of the UK’s economy.
BDO, an accounting and business advisory company, reported that the UK economy was beginning to ‘turn a corner’. However, as this was based upon Bank of England (BoE) interest rate cuts, GBP’s gains were capped.
Sterling could reverse its gains today, if UK wage growth cooled and unemployment increased in March as forecast.
Euro (EUR) rises as USD falls
Monday saw the euro (EUR) strengthen against some peers, despite a dearth of Eurozone data releases.
The common currency managed to attract investor support due to its inverse correlation with a sinking US dollar (USD). However, its gains may have been restricted by cheery trade.
This evening, the euro could continue to strengthen if the latest German ZEW economic sentiment index improves as expected.
US dollar (USD) wanes amid risk-on trade
The US dollar began this week on unsteady ground, as upbeat trading conditions undercut the safe-haven currency.
Bullish trade prompted investors to shift away from the ‘greenback’, leading it to slip against its peers. Additionally, the upbeat impulse prompted investors to dismiss hawkish sentiments from Federal Reserve official Philip Jefferson.
Tonight, Federal Reserve Chair Jerome Powell is set to deliver a speech. If he maintains the Fed’s recent hawkish bias, USD could strengthen.
Canadian dollar (CAD) clipped by weakening US dollar
Despite oil prices rising on Monday, the Canadian dollar (CAD) struggled to keep afloat due to its close ties to a fading US dollar.
Turning to today, a lack of domestic data could prompt the ‘loonie’ to move without a clear direction against its peers.
Data releases
May 14th 16:00 GBP Unemployment Rate (Mar) 4.3%
May 14th 16:00 GBP Average Earnings (Mar) 5.9%
May 14th 19:00 EUR German ZEW Economic Sentiment Index (May) 46.3
May 14th 22:30 USD PPI (Apr) 0.3%
May 15th 00:00 USD Fed Chair Powell Speech