Australian dollar (AUD) stumbles amid sombre trade
Downbeat trading conditions wore on the Australian dollar (AUD) during yesterday’s session.
Due to its risk-sensitive nature, AUD struggled to remain afloat against most major peers. However, its downside may have been limited by growing anticipation for the Reserve Bank of Australia’s (RBA) upcoming interest rate decision.
While the RBA is not expected to change rates later today, any hawkish assertions could strengthen the ‘Aussie’ against its peers.
New Zealand dollar (NZD) struggles as service sector slows
On Monday, the New Zealand dollar (NZD) weakened against most peers, as the latest New Zealand services index disappointed.
The service sector weakened to its lowest non-lockdown levels since the survey began in 2007, indicating a dramatic slowdown in economic activity. With the vital sector contracting at speed, NZD struggled to attract support.
Owing to a light data calendar, the ‘kiwi’ may remain weakened against most major peers today.
Pound (GBP) mixed amid lack of data
UK data remained hard to find on Monday, which saw the pound (GBP) trade in a mixed capacity.
The absence of data saw the increasingly risk-sensitive currency trade in line with the market mood. GBP fell against safer peers but rose against riskier rivals.
Minimal data may keep Sterling listless today. In addition, hesitation ahead of the Bank of England’s (BoE) upcoming interest rate decision and tomorrow’s inflation data could mute GBP.
Euro (EUR) regains ground amid hawkish ECB remarks
Monday saw the euro (EUR) recover some of its recent losses, following hawkish comments by European Central Bank (ECB) Chief Economist Philip Lane.
Lane suggested that the ECB’s monetary policy needed to remain restrictive, which prompted markets to rule out a July interest rate cut. However, any gains may have been capped by persistent political anxieties.
The German ZEW economic sentiment index for June is due to print today and is expected to show rising confidence. This could allow EUR to recover further.
US dollar (USD) supported by risk-off trade
The US dollar (USD) began last week on firm footing, as risk-averse trade provided safe-haven flows to the currency.
However, an absence of market-moving macroeconomic releases may have kept a ceiling on any gains for the ‘greenback’.
Turning to today, the latest US retail sales data for May is due to print. With a 0.2% increase forecast, robust consumer spending could see USD strengthen further.
Canadian dollar (CAD) propped up by improving oil prices
Yesterday, rising oil prices kept the crude-sensitive Canadian dollar (CAD) afloat despite an absence of data.
Canadian economic releases remain hard to come by today, which may prompt the ‘loonie’ to trade in tandem with oil prices once again.
Data releases
Jun 18th 14:30 AUD RBA Interest Rate Decision 4.35%
Jun 18th 19:00 EUR German ZEW Economic Sentiment Index (Jun) 50
Jun 18th 22:30 USD Retail Sales (May) 0.2%