Australian dollar (AUD) supported by higher commodity prices
The Australian dollar (AUD) gained support from higher commodity prices and from stronger risk sentiment overnight. Despite these gains, weak Australian retail trade data is expected today, potentially limiting AUD’s upside.
Looking ahead, the Australian CPI figures due on Wednesday could introduce significant volatility to the currency.
New Zealand dollar (NZD) trades in a narrow range
The New Zealand dollar (NZD) traded within a narrow range overnight. With limited data releases today, NZD exchange rates may remain relatively steady, influenced primarily by broader market trends.
Looking forward, ANZ Business Confidence figures will be released on Wednesday, which could impact the NZD if the results deviate significantly from expectations.
Pound (GBP) muted amid UK market closure
The pound (GBP) remained subdued as UK markets were closed on Monday for the Spring Bank Holiday. With a quiet week ahead in terms of data releases, GBP is likely to trade in line with general risk tones in the overall market. Investors will look to broader market sentiment to guide GBP movements in the absence of significant domestic data.
Euro (EUR) influenced by ECB comments
The euro (EUR) found direction from comments made by the ECB’s François Villeroy overnight. Villeroy indicated that an ECB interest rate cut in June is almost certain barring any surprises and highlighted substantial room for cuts from the current 4.0% level. The market is pricing in approximately 60 basis points of ECB interest rate cuts by the end of the year. These expectations may continue to shape EUR’s performance.
Additionally, German Prelim CPI figures will be released on Wednesday, potentially adding volatility if the data deviates from forecasts.
US dollar (USD) eases amid market closure
The US dollar (USD) eased slightly overnight, influenced by the closure of US Treasury and equity markets for the Memorial Day public holiday. Today is expected to be quiet, with only second-tier US economic data scheduled for release. As a result, the ‘greenback’ may trade within a narrow range.
Looking forward, the USD will be driven by key data releases later in the week: consumer confidence figures will be released overnight, followed by GDP and unemployment claims on Thursday. These data points are likely to significantly impact the ‘greenback’s’ performance, providing direction for the USD.
Data releases
Tuesday 28/05 11:30am AUD Retail Sales m/m
Wednesday 29/06 12:00am USD CB Consumer Confidence