Australian dollar (AUD) struggles as business confidence falls
The Australian dollar (AUD) endured selling pressure on Tuesday, as markets reacted to the latest Australian business confidence data.
In May, sentiment deteriorated from an upwardly revised 2 to -3, as the Australian economy continued to soften. However, signs of persistent inflationary pressure kept the ‘Aussie’ afloat amid pared-back Reserve Bank of Australia (RBA) interest rate cut bets.
Owing to a lack of impactful Australian data, AUD may struggle to find its footing during today’s session, especially if the market mood remains gloomy.
New Zealand dollar (NZD) underpinned by rising dairy prices
Yesterday, robust commodities trade allowed the New Zealand dollar (NZD) to shrug off a lack of domestic data.
While dairy prices increased, the ‘kiwi’ likely saw its movements capped by a downbeat market mood.
New Zealand releases remain largely absent today, which could leave NZD to trade at the behest of the market mood.
Pound (GBP) choppy amid rising unemployment
A shock rise in UK unemployment in April rocked the pound (GBP) on Tuesday.
However, stronger-than-forecast wage growth helped keep GBP afloat, as rising wages could force the Bank of England (BoE) to keep interest rates higher for longer.
Downbeat UK data may weigh on Sterling today. The latest UK GDP figures are expected to show a stall in economic activity in April, which may weaken the pound.
Euro (EUR) remains downbeat amid political anxiety
Fears over European political stability continued to weaken the euro (EUR) on Tuesday.
While France’s snap election continues to dominate the headlines, the poor result achieved by German coalition parties is also sparking concerns. Furthermore, data releases were thin on the ground, keeping the focus firmly on political jitters.
Turning to today, European Central Bank (ECB) policymaker Isabel Schnabel is due to speak. However, angst over the bloc’s political situation could remain the key driver of EUR movement.
US dollar (USD) firms ahead of Fed decision
Tuesday saw the US dollar (USD) inch higher to strike a fresh one-month high as markets continued to bet on a more hawkish stance from the Federal Reserve.
With the Fed’s rate decision looming, many investors expect the US central bank to indicate that interest rates may need to stay higher for longer.
This evening, the latest US consumer price index is due to print. Markets anticipate that headline inflation remained at 3.4% in May, which could diminish Fed rate cut bets and lift USD.
Canadian dollar (CAD) mixed amid rocky oil prices
Volatile oil trade kept the crude-sensitive Canadian dollar (CAD) levelled against its peers on Tuesday.
The ‘loonie’ is likely to continue trading in line with oil price fluctuations today. Should crude trade improve, CAD may strengthen.
Data releases
Jun 12th 16:00 GBP GDP (Apr) 0%
Jun 12th 19:30 EUR ECB Schnabel Speech
Jun 12th 22:30 USD Inflation Rate (May) 3.4%
Jun 12th 23:00 EUR ECB Guindos Speech