Australian dollar (AUD) dented by falling corporate profits
On Tuesday, the Australian dollar (AUD) weakened against its peers following a larger-than-expected decline in Australian corporate profits.
The first quarter of 2024 saw profits slide by 2.5% – significantly more than forecasts of a 0.9% drop. Furthermore, risk-averse trade pressured the ‘Aussie’.
Later this morning, AUD may be able to recover its losses if the Australian economy expanded by 0.2% in Q1 2024, as markets forecast.
New Zealand dollar (NZD) mixed amid lack of data
Due to an absence of impactful data yesterday, the New Zealand dollar (NZD) was left to trade in tandem with market dynamics.
As the market mood shifted, the risk-sensitive ‘kiwi’ wavered.
With economic releases still thin on the ground today, NZD may once again face mixed movement.
Pound (GBP) underpinned by retail sales recovery
News that UK retail sales recovered in May served to cushion the pound (GBP) during yesterday’s session.
Sales increased by 0.4% on an annual basis, a recovery from April’s drop of 4.4%. However, due to this being beneath expectations of a 1.2% increase, Sterling failed to climb.
This evening, the UK’s final services PMI for May is due out. Could confirmation of a sharp slowdown in the sector dent GBP?
Euro (EUR) undermined by rising German unemployment
Yesterday, the euro (EUR) softened against its peers, in the wake of the latest German employment data.
While the unemployment rate held at 5.9% in May, the number of people out of work rose to its highest level since March 2021. Furthermore, a rising US dollar (USD) added additional pressure to EUR due to the currencies’ negative correlation.
Turning to today’s session, the Eurozone’s finalised PMI figures are the only release due out. Barring a major deviation from the preliminary estimates, the PMI may not cause much movement.
US dollar (USD) rallies amid downbeat market mood
On Tuesday, the safe-haven US dollar rebounded strongly from a near two-month low due to a thoroughly dismal market mood.
However, the US JOLTs job openings figures for April printed below forecasts in the evening, signalling growing slack in the American labour market. This put a lid on the US dollar’s gains.
Tonight, the ‘greenback’ may strengthen further if the ISM services PMI for May signposts a return to growth for the sector.
Canadian dollar (CAD) muted as oil prices fall
Yesterday, the crude-linked Canadian dollar (CAD) struggled to find its footing as oil prices dropped during the session.
The Bank of Canada (BoC) is expected to begin cutting interest rates today. If its forward guidance hints at consecutive rate cuts, CAD may plummet.
Data releases
Jun 5th 11:30 AUD GDP Growth Rate (Q1) 0.2%
Jun 5th 18:30 EUR Services PMI (May) 53.3
Jun 5th 18:30 GBP Services PMI (May) 52.9
Jun 5th 22:15 USD ADP Employment Change 173,000
Jun 5th 23:45 CAD BoC Interest Rate Decision 4.75%
Jun 5th 00:00 USD ISM Services PMI (May) 50.5