Australian dollar (AUD) claws back losses following PMI data
After weakening in the wake of hawkish Federal Reserve meeting minutes early yesterday morning, positive preliminary PMIs for May then lifted the Australian dollar (AUD) as the session progressed.
While Australian service sector activity softened somewhat, analysis of the data suggested that the country’s economy is growing at a steady pace, which helped AUD regain ground.
Turning to today, the ‘Aussie’ may struggle to find a clear direction amid a lack of impactful data releases.
New Zealand dollar (NZD) rises as retail sector recovers
The New Zealand dollar (NZD) gained ground yesterday, as New Zealand retail sales for the first quarter of 2024 printed above forecasts.
On a quarterly basis, sales improved by 0.5%, notably above expectations of a 0.3% decline. This was the first growth in sales in two years, with the positive data boosting NZD.
The ‘kiwi’ is likely to be driven by market risk dynamics today, as a light data calendar may expose it to shifts in risk sentiment.
Pound (GBP) fluctuates amid mixed PMIs
Yesterday, the pound (GBP) seesawed in the wake of the UK’s preliminary PMIs for May.
The service index softened more than forecast, falling from 54.7 down to 52.9. However, this was offset by a 22-month high for the UK manufacturing index, which unexpectedly returned to growth.
Turning to today, if UK retail sales fell in April as forecast, the pound may end the week on a sour note.
Euro (EUR) grinds higher amid improving outlook
On Thursday, the euro (EUR) managed to firm against some peers due to a robust set of preliminary PMIs.
The manufacturing index improved above expectations, despite remaining in contraction. Meanwhile, the service sector index missed forecasts but still pointed to strong growth in activity.
With little other data on the calendar, confirmation of an expansion in Germany’s GDP for the first quarter of 2024 may lift EUR.
US dollar (USD) rebounds thanks to strong economic data
Hints of another Federal Reserve interest rate hike boosted the US dollar (USD) early on Thursday morning, before profit-taking slashed the currency’s gains.
USD was able to rebound during the American trading hours, as strong US data – including a positive services PMI and initial jobless claims – boosted the US dollar’s appeal.
Tonight, the ‘greenback’ could see fresh selling pressure if US durable goods orders fell by 0.8% in April as markets expect.
Canadian dollar (CAD) unmoved by recovering oil prices
Rising oil prices failed to fully support the Canadian dollar (CAD) yesterday, as the currency wavered against most of its peers.
Turning to today, the ‘loonie’ may remain mixed if the latest retail sales data for March prints at 0% as forecast.
Data releases
May 24th 16:00 EUR German GDP Final (Q1) 0.2%
May 24th 16:00 GBP Retail Sales (Apr) -0.4%
May 24th 22:30 CAD Retail Sales (Mar) 0%
May 24th 22:30 USD Durable Goods Orders (Apr) -0.8%