Australian dollar (AUD) wavers despite increased inflation outlook
The Australian dollar (AUD) initially rose on Thursday after the latest Australian consumer inflation expectations printed higher than forecast, thereby reinforcing recent speculation around the possibility of another interest rate hike from the Reserve Bank of Australia (RBA).
However, RBA Deputy Governor Andrew Hauser downplayed the strong CPI reading during a speech on Thursday evening, pressuring AUD and trimming its earlier gains.
A data-light end to the week for Australia may see the acutely risk-sensitive ‘Aussie’ driven primarily by global risk dynamics.
New Zealand dollar (NZD) undermined by waning business confidence
The New Zealand dollar (NZD) struggled to attract investor support on Thursday following a larger-than-forecast decline in the ANZ business outlook index.
Printing significantly below market projections at 6.2, the index pointed to the fifth consecutive decline in New Zealand business confidence. Additionally, consumer confidence fell in tandem, pointing to widespread economic pessimism.
Looking ahead, a lack of fresh NZD releases today could see the ‘kiwi’ trade without a clear direction.
Pound (GBP) falters following BoE pessimism
The pound (GBP) faced headwinds yesterday following the Bank of England’s (BoE) latest Financial Stability Report.
The central bank expressed concerns that a flurry of upcoming global elections could fuel further economic uncertainty in the UK. Policymakers also stated that persistently high borrowing costs are hindering the stability of the British financial system.
This afternoon, the UK’s finalised GDP figures are due for release. Confirmation that the UK economy strengthened in the first quarter may lift Sterling sentiment.
Euro (EUR) pressured as economic woes persist
Yesterday, the euro (EUR) struggled to garner investor interest as the Eurozone’s latest economic sentiment indicator unexpectedly fell in June.
Elsewhere, investors appeared largely reluctant to place any aggressive bets on the common currency with the first round of France’s legislative election only days away.
This evening, German unemployment is set to hold at 5.9%, close to a three-year high. Sluggish employment in the Eurozone’s largest economy could weigh on EUR exchange rates.
US dollar (USD) sinks amid economic slowdown
The US dollar (USD) retreated from multi-week highs yesterday amid confirmation that the American economy slowed sharply during the first quarter of 2024.
Adding to USD’s downside was the latest initial jobless claims release in the US, which showed that new jobless claims held close to a ten-month high last week. In addition to this, a decline in US durable goods orders throughout May further soured USD sentiment.
Tonight, the latest core PCE price index is due for release in the US. As the Federal Reserve’s preferred gauge of inflation, any notable easing may see the ‘greenback’ tumble amid ramped up Fed rate cut bets.
Canadian dollar (CAD) buoyed by oil uptick
Yesterday, the crude-linked Canadian dollar (CAD) was kept afloat by a slight increase in oil prices, driven by renewed concerns about supply chain shocks across the Middle East and Russia.
However, CAD’s upside potential was seemingly capped due to its positive correlation with a weakened US dollar.
Canada’s latest GDP data is due for release tonight, with a forecast return to growth likely to lift the ‘loonie’.
Data releases
Jun 28th 16:00 GBP GDP Growth Rate Final (Q1) 0.6%
Jun 28th 17:55 EUR German Unemployment Rate (Jun) 5.9%
Jun 28th 20:00 USD Fed Barkin Speech
Jun 28th 22:30 CAD GDP Growth Rate (April) 0.3%
Jun 28th 22:30 USD Core PCE Price Index (May) 2.6%