Australian dollar (AUD) clipped by disappointing retail data
Disappointing Australian retail sales data undermined the Australian dollar (AUD) yesterday, as sales failed to significantly improve.
Sales increased by 0.1% in April, below expectations of a 0.2% rise. Analysis revealed that this marked the second month of reduced consumer spending, weighing on AUD.
The monthly consumer price index indicator for April is due for release later this morning. If inflation continued to cool in April, the ‘Aussie’ may weaken.
New Zealand dollar (NZD) flat amid lack of data
Owing to a lull in domestic data releases, the New Zealand dollar (NZD) failed to gain ground on Tuesday.
However, due to an upbeat market mood, the risk-sensitive ‘kiwi’ managed to remain afloat against its rivals.
This morning, NZD may strengthen if business confidence ticked higher in May as markets expect.
Pound (GBP) wavers despite upbeat retail data
The pound (GBP) wobbled throughout Tuesday’s session, despite upbeat retail data from the Confederation of British Industry (CBI).
While the CBI’s distributive trades index climbed to 8 in May from -44, the mid-tier data failed to prompt any notable upside in the pound.
During today’s session, the pound may continue to remain muted due to an absence of data.
Euro (EUR) supported by fading USD
On Tuesday, the euro (EUR) came under pressure amid dovish commentary from the European Central Bank (ECB).
ECB Chief Economist Philip Lane further cemented bets on a June interest rate cut, dampening EUR. However, a weakening US dollar (USD) may have kept the single currency afloat, due to EUR’s negative correlation with USD.
This evening, the euro could strengthen if German inflation rose as expected in May, as it may prompt investors to rethink bets on future ECB rate cuts.
US dollar (USD) undermined by risk-on trade
Amid an absence of American data releases, the US dollar weakened against its peers during yesterday’s session.
With risk appetite making a cautious comeback over the day’s trade, the safe-haven ‘greenback’ struggled to stay afloat.
Today, USD is likely to continue trading in line with risk appetite. If the market mood sours, the US dollar could stage a recovery.
Canadian dollar (CAD) unmoved by rising PPI
Yesterday, the Canadian dollar (CAD) remained flat against its peers, despite rising PPI and oil prices, as CAD’s positive correlation with USD stifled its upside potential.
Turning to today, the ‘loonie’ may struggle to find its footing due to a light data calendar.
Data releases
May 29th 11:00 AUD Monthly CPI Indicator (Apr) 3.4%
May 29th 11:00 NZD ANZ Business Confidence (May) 15
May 29th 16:00 EUR German GfK Consumer Confidence (Jun) -22.5
May 29th 22:00 EUR German Inflation (May) 2.4%