Australian dollar (AUD) bolstered by hot inflation data
Hotter-than-expected monthly inflation data underpinned the Australian dollar (AUD) during Wednesday’s session.
Inflation printed at 3.6% in April, showing an increase from March’s level of 3.5%. This sparked bets that the Reserve Bank of Australia (RBA) may have more work to do to control inflation. However, a deteriorating market mood saw AUD trim its gains.
Today, a lack of Australian data releases could prevent the ‘Aussie’ from finding a clear trajectory.
New Zealand dollar (NZD) undermined by downbeat business confidence data
New Zealand’s latest business confidence index for May missed forecasts yesterday, pressuring the New Zealand dollar (NZD).
In addition to the fourth consecutive decline in business sentiment, a shift in the markets towards bearish trade weighed on the risk-sensitive ‘kiwi’.
Today, investors are likely to pay close attention to the first budget from the New Zealand National Party-led government. Finance Minister Nicola Willis is expected to introduce tax cuts, which may boost NZD if these are seen as inflationary.
Pound (GBP) adrift amid lack of data
The pound (GBP) remained listless during Wednesday’s session, amid a continued lull in data releases.
However, investors remained focused on the Bank of England’s (BoE) next steps. With a June interest rate cut seemingly off the table, Sterling remained underpinned.
Today, the pound is unlikely to find its footing as data releases remain scarce.
Euro (EUR) firms amid hot German inflation
On Wednesday, the euro (EUR) enjoyed modest support following hotter-than-expected German inflation data.
In May, German headline inflation rose to 2.4%, an increase from April’s reading of 2.2%, dampening European Central Bank (ECB) rate cut bets. Additionally, German consumer sentiment improved in June, with the index rising to -20.9 which further underpinned the euro.
This evening, the common currency could rise further if Eurozone unemployment remained at record lows in April.
US dollar (USD) strengthens amid souring market mood
Although data releases remained few and far between for the US dollar (USD) yesterday, the currency still managed to strengthen.
The safe-haven ‘greenback’ gained ground against riskier assets, as growing concerns over further tightening from the Federal Reserve dampened the market mood and aided USD.
Tonight, the US dollar could reverse course if latest GDP estimate for the first quarter of 2024 confirms slowing growth.
Canadian dollar (CAD) muted as oil prices fluctuate lower
Yesterday, the crude-sensitive Canadian dollar (CAD) traded sideways as oil prices wavered, heading lower overall.
Turning to today, the ‘loonie’ could remain largely directionless amid a continued absence of domestic data releases.
Data releases
May 30th 09:00 USD Fed Bostic Speech
May 30th 12:00 NZD Budget 2024
May 30th 19:00 EUR Economic Sentiment (May) 96.2
May 30th 19:00 EUR Unemployment Rate (Apr) 6.5%
May 30th 22:30 USD GDP Growth Rate (Q1) 1.3%
May 30th 22:30 USD Initial Jobless Claims (25/May) 218,000