Australian dollar (AUD) tepid amid mixed Chinese data
Last Friday, the Australian dollar (AUD) came under pressure in the wake of mixed Chinese economic data.
Retail sales in China printed below expectations in April, while industrial production exceeded forecasts. Due to a lack of domestic Australian data, AUD’s status as a Chinese proxy currency left it adrift.
With Australian data remaining hard to come by today, the ‘Aussie’ may remain stagnant over the session.
New Zealand dollar (NZD) cushioned by PPI uptick
New Zealand producer price inflation for the first quarter of 2024 printed above forecasts last Friday, underpinning the New Zealand dollar (NZD).
However, a downbeat market mood undermined the ‘kiwi’ during the latter part of the session due to its risk-sensitive nature.
Market sentiment is likely to remain the predominant driver of movement for NZD today, due to little in the way of domestic data releases.
Pound (GBP) listless amid lack of data
Last Friday, the pound (GBP) endured rudderless trade due to a light data calendar.
With no new catalysts for movement, the focus remained on dovish commentary from the Bank of England (BoE) earlier in the week. As markets anticipate an imminent rate cut, Sterling struggled to attract support.
GBP exchange rates could recover this evening, if BoE Deputy Governor Ben Broadbent strikes a more hawkish tone than his colleagues. On the other hand, any dovish remarks could undermine the pound.
Euro (EUR) dampened by dovish ECB comments
Last Friday, the euro (EUR) came under pressure following dovish commentary from European Central Bank (ECB) Vice-President Luis de Guindos.
Guindos stated that inflation was likely to reach the target of 2% by 2025, which boosted interest rate cut bets. With markets convinced the ECB will cut rates next month, the euro wavered.
Looking ahead, the single currency could struggle to find a clear direction today due to an absence of Eurozone data.
US dollar (USD) ticks higher amid risk aversion
The US dollar (USD) firmed at the end of last week, as a risk-averse mood swept markets.
Additionally, a hawkish pushback from Federal Reserve officials may have additionally strengthened the US dollar. Although the Fed is expected to begin unwinding rates this year, markets are growing less confident in a September starting point.
Tonight, a slate of speeches from Fed officials may provide some impetus for USD. If they present a consistent hawkish message, the ‘greenback’ may strengthen.
Canadian dollar (CAD) rudderless despite rising oil prices
Despite oil prices continuing to rise last Friday, the crude-tied Canadian dollar (CAD) traded without direction due to an absence of data.
Turning to today’s session, the ‘loonie’ may endure muted trade as investors look ahead to tomorrow’s inflation data.
Data releases
May 20th 19:00 GBP BoE Broadbent Speech
May 20th 22:45 USD Fed Bostic Speech
May 20th 23:00 USD Fed Barr Speech
May 20th 23:00 USD Fed Waller Speech