Australian dollar (AUD) spikes amid strong CPI
The Australian dollar (AUD) surged yesterday following Australia’s latest monthly CPI indicator.
Domestic inflation accelerated more than forecast in May, rising to 4% and beating expectations of a more modest rise to 3.8%. Reaching its highest level since November 2023, the reading saw markets mulling over the likelihood of an interest rate hike from the Reserve Bank of Australia (RBA) in its August meeting.
RBA Deputy Governor Andrew Hauser is due to speak this evening, with any hawkish commentary likely to boost the ‘Aussie’. Additionally, the latest consumer inflation expectations are due to have risen in June, which may see AUD extend its recent gains.
New Zealand dollar (NZD) fluctuates amid data-light session
The New Zealand dollar (NZD) wavered against its stronger peers yesterday amid an ongoing lull in domestic releases.
A shift towards gloomier trading conditions further stymied the acutely risk-sensitive ‘kiwi’ as the session neared its end.
Coming up, the ANZ’s latest business and consumer confidence surveys are both due for release this morning. Could a softening outlook hamper NZD exchange rates?
Pound (GBP) falters amid downbeat retail data
The pound (GBP) faced headwinds yesterday following a sharp decline in the Confederation of British Industry’s (CBI) latest distributive trades data.
Tumbling to -24 in June, the monthly retail sales balance dashed hopes of a recovery in the UK’s retail sector, placing British consumer activity under scrutiny once again.
This evening, the Bank of England’s (BoE) latest Financial Stability Report is due for release. Should the BoE express an optimistic view of the stability of the UK financial system, GBP may attract some investor support.
Euro (EUR) falls amid economic pessimism
Yesterday, the euro (EUR) tumbled against some of its major rivals following the latest German GfK consumer climate survey.
Consumer confidence unexpectedly declined for the first time in five months in Germany, edging lower to -21.8 heading into July. The downbeat reading was reflective of an ongoing period of low economic morale in the Eurozone’s largest economy, highlighting Germany’s rocky road to recovery.
Turning to today, could a slight uptick in the Eurozone’s economic sentiment indicator lend the common currency some support?
US dollar (USD) extends gains amid data lull
The US dollar (USD) continued to trend higher yesterday, hitting a fresh eight-week high, despite a lack of notable macroeconomic releases in the US.
The ‘greenback’ likely enjoyed ongoing support thanks to hawkish Federal Reserve commentary earlier in the week. Elsewhere, US Treasury yields held on to recent gains, further boosting the ‘greenback’.
This afternoon, confirmation that US GDP slowed significantly during the first quarter of 2024 may see the ‘greenback’ retreat from its recent winning streak.
Canadian dollar (CAD) lifted by USD correlation
Yesterday, the Canadian dollar (CAD) was kept afloat by a slight uptick in crude oil prices. The commodity-linked ‘loonie’ was further supported by its positive correlation with a strengthening US dollar.
Canada’s latest weekly earnings data is due out this evening, with a forecast decline likely to pressure CAD.
Data releases
Jun 26th 11:00 AUD Consumer Inflation Expectations (Jun) 4.3%
Jun 26th 11:00 NZD ANZ Business Confidence (Jun) 10.2
Jun 26th 19:00 EUR Economic Sentiment (Jun) 96.2
Jun 26th 20:00 AUD RBA Hauser Speech
Jun 26th 22:30 USD GDP Growth Rate (Q1) 1.3%
Jun 26th 22:30 USD Durable Goods Orders (May) 0%