Australian dollar (AUD) slides amid risk-off trade
Wednesday saw the Australian dollar (AUD) weaken after a sluggish start, as a lack of data left the currency vulnerable to bearish trade.
As the session progressed and risk appetite waned, the ‘Aussie’ struggled to keep afloat against its peers.
Turning to today, AUD could regain some support if the preliminary manufacturing PMI for May returned to growth as forecast.
New Zealand dollar (NZD) boosted by hawkish RBNZ
The New Zealand dollar (NZD) rallied yesterday in the wake of a hawkish interest rate hold from the Reserve Bank of New Zealand (RBNZ).
Although the RBNZ kept interest rates unchanged, the bank signalled that it could hike rates again and pushed back its forecasts for rate cuts.
The ‘kiwi’ may trim some of its gains this morning, if retail sales for the first quarter of 2024 declined as forecast.
Pound (GBP) climbs as inflation beats forecasts
Yesterday, the pound (GBP) leapt higher following hotter-than-expected UK inflation data for April.
Headline and core inflation cooled less than anticipated, prompting investors to adjust their Bank of England (BoE) rate cut bets. Some volatility in GBP ensued amid profit-taking, but Sterling was able to cling on to most of its gains.
Turning to today, if the UK’s service sector growth slowed in May as forecast, the pound may soften against its peers.
Euro (EUR) wavers amid lack of data
On Wednesday, the euro (EUR) struggled to attract support from investors due to a light data calendar.
Furthermore, continued expectations of a June rate cut from the European Central Bank (ECB) undermined EUR exchange rates. With other central banks now likely to cut after the ECB, the divergence added additional pressure.
Today, the euro may tick higher if the preliminary services PMI shows an expansion in May as is forecast.
US dollar (USD) gains ground amid shifting risk appetite
The US dollar (USD) endured mixed trade over the course of yesterday’s session, eventually trending higher thanks to safe-haven flows to the ‘greenback’ and a recovery in US Treasury bond yields.
However, the FOMC’s latest meeting minutes loomed over the session, keeping a lid on USD movement.
Looking ahead, lacklustre US service-sector growth and jobless claims could mute the ‘greenback’ this evening.
Canadian dollar (CAD) weakens amid falling oil prices
Yesterday saw the crude-sensitive Canadian dollar (CAD) fall against its peers as oil prices began to slide.
Turning to today’s session, the ‘loonie’ may trade in a narrow range due to a lack of domestic data releases.
Data releases
May 23rd 09:00 AUD Services PMI (May) 53.2
May 23rd 09:00 AUD Manufacturing PMI (May) 50.1
May 23rd 18:00 EUR Services PMI (May) 53.5
May 23rd 18:30 GBP Services PMI (May) 54.7
May 23rd 22:30 USD Initial Jobless Claims (18/May) 220,000
May 23rd 23:45 USD Services PMI (May) 51.3