Australian dollar (AUD) uncertain as GDP misses forecasts
Yesterday, the Australian dollar (AUD) initially strengthened, despite GDP missing forecasts to show just 0.1% growth in the first quarter of 2024.
The upside came amid hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock and an upbeat services PMI from China. However, AUD relinquished its gains during the European trading hours.
Later this morning, the ‘Aussie’ could regain some strength if April’s trade data improved as forecast.
New Zealand dollar (NZD) ticks higher amid rising exports
The New Zealand dollar (NZD) firmed on Wednesday after New Zealand’s latest terms of trade figures came in better than expected.
As exports are seen as a valuable part of the New Zealand economy, this data helped to cheer NZD investors.
However, data releases are set to dry up today, which could leave the risk-sensitive ‘kiwi’ vulnerable to shifts in the market mood.
Pound (GBP) listless amid short supply of data
Amid an absence of impactful data, the pound (GBP) struggled to find a clear direction on Wednesday.
Sterling was able to find some cushioning from a cautiously upbeat market mood, which kept the UK currency afloat against safer assets.
UK data remains hard to come by today, which may keep GBP moving without a clear direction.
Euro (EUR) tepid ahead of ECB decision
Yesterday, the euro (EUR) wavered against its rivals as markets began to look ahead to the European Central Bank’s (ECB) interest rate decision.
The trepidation prevented EUR from attracting much support, despite confirmation of robust service sector activity across the Eurozone.
Tonight, the ECB is expected to cut interest rates by 25bps. However, markets are unsure about future cuts – if the ECB indicates it was a ‘one and done’ move, the common currency may rally.
US dollar (USD) supported by strong service growth
On Wednesday, the US dollar (USD) gained ground against its peers following a better-than-expected ISM services PMI.
While a mixed market mood contributed initial safe-haven flows, accelerating growth in the vital services sector drove USD higher.
Tonight, the ‘greenback’ may trim some of its gains if jobless claims increased in the week ending 1 June as forecast.
Canadian dollar (CAD) slides as BoC cuts rates
Yesterday, the Canadian dollar (CAD) slipped following the Bank of Canada’s (BoC) first interest rate cut. BoC Governor Tiff Macklem also indicated further reductions were possible, piling additional pressure on CAD.
The ‘loonie’ may struggle to find its footing today, as markets continue to digest the BoC’s dovish forward guidance. However, a strong Ivey PMI reading could cushion the currency later in the session.
Data releases
Jun 6th 11:30 AUD Balance of Trade (Apr) AU$5.4bn
Jun 6th 16:00 EUR German Factory Orders (Apr) 0.3%
Jun 6th 19:00 EUR Retail Sales (Apr) -0.3%
Jun 6th 22:15 EUR ECB Interest Rate Decision 4.25%
Jun 6th 22:30 CAD Balance of Trade (Apr) CA$-1.4bn
Jun 6th 22:30 USD Initial Jobless Claims (1/Jun) 220,000
Jun 7th 00:00 CAD Ivey PMI (May) 65