Australian dollar (AUD) wobbles amid cooling Chinese inflation
With domestic data in short supply, the Australian dollar (AUD) fluctuated yesterday as China’s latest inflation data was pulled into focus.
Chinese inflation softened in June, sparking growth concerns but also spurring speculation of further economic stimulus measures. Due to AUD’s status as a proxy currency for the Chinese economy, the ‘Aussie’ wavered.
Looking ahead, could rising consumer inflation expectations in Australia boost AUD later this morning?
New Zealand dollar (NZD) plunges on dovish RBNZ rate hold
The New Zealand dollar (NZD) tumbled to multi-week lows against some of its peers on Wednesday following the Reserve Bank of New Zealand’s (RBNZ) interest rate decision.
While the central bank left policy untouched, as expected, its accompanying guidance proved dovish, causing the ‘kiwi’ to plummet.
A data-light session today could see NZD trade without a clear direction, with the New Zealand dollar potentially left to lick its wounds.
Pound (GBP) firms on hawkish BoE remarks
The pound (GBP) strengthened overnight as Bank of England (BoE) Chief Economist Huw Pill struck a hawkish tone during a speech in London.
Pill suggested that high underlying services and wage inflation in the UK could see the central bank maintain its restrictive stance for longer, thereby denting bets on an August rate cut.
This evening, GBP investors will look towards the UK’s latest GDP data. Signs of economic recovery in the UK may boost GBP sentiment.
Euro (EUR) unclear amid lack of data
The euro (EUR) remained rudderless yesterday as a lack of new data and French political uncertainty left the single currency struggling to find a clear direction.
However, EUR was able to resist losses thanks to its strong negative correlation with a retreating US dollar (USD).
Aside from Germany’s final inflation rate for June, which may have little impact on the euro, EUR data is in short supply again today. The common currency could once more see muted trade.
US dollar (USD) retreats as US inflation figures loom
The US dollar surrendered some of Tuesday’s gains yesterday as USD investors turned cautious ahead of tonight’s consumer price index.
With inflation expected to fall, the possibility of a September interest rate cut from the Federal Reserve put some pressure on the ‘greenback’.
If tonight’s American CPI figures do show easing price pressures, the US dollar could face more notable losses.
Canadian dollar (CAD) buoyed by rising oil prices
The crude-linked Canadian dollar (CAD) strengthened yesterday evening as rising oil prices lifted the ‘loonie’.
With Canadian economic data thin on the ground today, oil price dynamics may continue driving CAD movement.
Data Releases
11th Jul 11:00 AUD Consumer Inflation Expectations (Jul) 4.5%
11th Jul 16:00 EUR German Inflation Rate (Jun) 2.2%
11th Jul 16:00 GBP GDP Growth Rate (May) 0.2%
11th Jul 22:30 USD Inflation Rate (Jun) 3.1%