Australian dollar (AUD) struggles as market mood worsens
Monday saw the Australian dollar (AUD) weaken against most major peers, as a light data calendar left it vulnerable.
As the session progressed, the market mood began to deteriorate. This prompted the acutely risk-sensitive ‘Aussie’ to fall against safer peers.
Investor attention is likely to be fixed on the Reserve Bank of Australia’s (RBA) latest meeting minutes, due this morning. If they skew dovish, AUD may slide further.
New Zealand dollar (NZD) slips amid light data calendar
Yesterday, the New Zealand dollar (NZD) fell against its rivals amid a lack of impactful data releases.
This left the ‘kiwi’ to trade in tandem with market dynamics, prompting it to lose out against safer assets.
NZD may trade sideways today, as investors look ahead to tomorrow’s interest rate decision from the Reserve Bank of New Zealand (RBNZ).
Pound (GBP) holds strong despite mixed BoE remarks
On Monday, the pound (GBP) enjoyed support despite mixed remarks from Bank of England (BoE) Deputy Governor Ben Broadbent.
Although Broadbent said that a summer rate cut was ‘possible’, he also said that many policymakers were wary of cutting interest rates too soon.
Today, if the latest industrial trends orders from the Confederation of British Industry (CBI) shows continued sector weakness, GBP may soften.
Euro (EUR) mixed amid lack of data
Due to a lull in data releases, the euro (EUR) traded in line with market dynamics during Monday’s session.
As a safer currency, this allowed EUR to strengthen against its riskier peers as the mood began to deteriorate. However, without clear data catalysts, the common currency may have seen its upside limited.
Looking ahead, the single currency could tick higher if the Eurozone trade surplus expanded in March, as economists have forecast.
US dollar (USD) rises amid hawkish Fed remarks
The US dollar (USD) strengthened yesterday, in the wake of hawkish commentary from Federal Reserve officials.
Fed Vice Chair Michael Barr stated that the central bank was in a good position to ‘hold steady’. This prompted investors pare back existing interest rate cut bets, lifting USD.
Tonight, another slate of speeches from Fed officials may provide fresh direction for USD exchange rates. If the speakers present a consistent hawkish outlook, the ‘greenback’ could climb.
Canadian dollar (CAD) fluctuates higher amid volatile oil prices
Yesterday saw the Canadian dollar (CAD) start subdued before a recovery in oil prices in the evening lifted the crude-sensitive currency.
Turning to today’s session, the ‘loonie’ may weaken if Canadian inflation cooled to 2.7% in April as forecast.
Data releases
May 21st 10:30 AUD Westpac Consumer Confidence Index (May) 83.1
May 21st 11:30 AUD RBA Meeting Minutes
May 21st 19:00 EUR Balance of Trade (Mar) €19.9bn
May 21st 20:00 GBP CBI Industrial Trends Orders (May) -20
May 21st 22:30 CAD Inflation Rate (Apr) 2.7%
May 21st 23:00 USD Fed Barkin Speech
May 21st 23:00 USD Fed Waller Speech
May 21st 23:05 USD Fed Williams Speech
May 21st 23:10 USD Fed Bostic Speech