Australian dollar (AUD) wavers higher on strong data
The Australian dollar (AUD) initially strengthened yesterday morning following strong domestic releases. Both the final services PMI for June and the preliminary retail sales data for May surpassed expectations, thereby lifting AUD.
A shifting market sentiment then saw AUD waver in the evening, before the mood improved and the ‘Aussie’ regained ground.
Looking ahead, a forecast widening of Australia’s trade surplus could boost investor confidence in the export-heavy economy, potentially bolstering the ‘Aussie’.
New Zealand dollar (NZD) volatile as risk appetite shifts
The New Zealand dollar (NZD) initially slipped yesterday amid a lack of NZD data.
However, an improving market mood overnight saw the risk-sensitive ‘kiwi’ bounce back.
Turning to today, global risk dynamics could once again drive NZD movement, with New Zealand data in short supply once again.
Pound (GBP) edges higher despite softening services sector
The pound (GBP) enjoyed modest support yesterday evening following the UK’s finalised services PMI.
The final index was revised sharply higher, which boosted GBP demand. However, as service sector activity still slowed, the pound’s upside potential was severely limited.
Turning to today, the pound could struggle to find a clear direction as Britons prepare to cast their votes in the UK general election.
Euro (EUR) stumbles amid cooling PPI
The euro (EUR) struggled to attract investor support on Wednesday evening following a decline in Eurozone producer prices in May.
While the decline in producer prices eased to its slowest pace in eleven months, further signs of disinflation in the bloc boosted European Central Bank (ECB) interest rate cut bets.
The focus for EUR investors during today’s session will likely be the publication of the ECB’s latest meeting minutes. Any dovish signals could hamper EUR exchange rates.
US dollar (USD) tumbles amid loosening labour market
The US dollar (USD) faced headwinds yesterday as worse-than-forecast US employment data reignited concerns of a softening US labour market.
Additionally, an unexpected contraction in US service sector activity piled further pressure on the ‘greenback’, with the currency suffering heavy losses.
Today, USD may encounter volatile trading conditions as the market response to the Federal Reserve’s latest meeting minutes continues to unfold.
Canadian dollar (CAD) slips amid narrowing trade surplus
The crude-linked Canadian dollar (CAD) fell yesterday as rising oil prices failed to counteract a larger-than-expected Canadian trade deficit in May.
Looking forward, could confirmation of increased services activity last month lift CAD?
Data Releases
4th Jul 11:30 AUD Balance of Trade (May) AU$6.67bn
4th Jul 16:00 GBP UK General Election
4th Jul 16:00 EUR German Factory Orders (May) 0.5%
4th Jul 21:30 EUR ECB Meeting Minutes
4th Jul 23:30 CAD Services PMI (Jun) 51.3