Australian dollar (AUD) volatile amid shifting risk appetite
The Australian dollar (AUD) initially firmed amid a risk-on mood yesterday, with the currency shrugging off an unexpected decline in consumer inflation expectations.
However, upbeat trading conditions failed to keep AUD afloat overnight, as market volatility saw the ‘Aussie’ fluctuate against its peers.
Looking ahead, could global risk dynamics continue to drive AUD movement today amid a lack of economic data?
New Zealand dollar (NZD) recovers amid cheery trade
The New Zealand dollar (NZD) rebounded from multi-week lows on Thursday as an increasing appetite for risk saw the ‘kiwi’ recover some of its recent losses.
Amid a lack of high-impact releases, NZD investors may look towards New Zealand’s latest business PMI, due for release this morning. Could slowing domestic business activity weigh on the ‘kiwi’?
Pound (GBP) firms on UK economic rebound
Extending its hawkish gains last night, the pound (GBP) climbed higher as the UK’s latest GDP data beat forecasts.
Spurred largely by increased services and construction activity, the UK economy expanded by 0.4% in May, surpassing expectations of a more modest 0.2% expansion. Signs of economic recovery saw Sterling trend higher as the session progressed.
Today, a lack of UK releases may see Sterling trade without a clear direction against its peers.
Euro (EUR) mixed despite easing German inflation
The euro (EUR) initially wavered yesterday as Germany’s finalised consumer price index eased to 2.2% as forecast.
This reinforced market speculation that the European Central Bank (ECB) will likely lower interest rates once more this year, applying modest pressure to the common currency. However, EUR was able to strengthen elsewhere due to its negative correlation with a plummeting US dollar (USD).
A data-light session in the Eurozone today could see limited movement for the single currency.
US dollar (USD) nosedives amid cooling CPI
The US dollar tanked on Thursday night following a cooler-than-forecast batch of US inflation data.
Both headline and core inflation fell more than expected in June, leading to ramped-up Federal Reserve interest rate cut bets. This, in turn, saw an improving market sentiment apply further pressure to the safe-haven ‘greenback’.
Coming up, could an elevated American producer price index be enough to provide USD with some much-needed support tonight?
Canadian dollar (CAD) tumbles in tandem with USD
A slight uptick in oil prices failed to lift the crude-linked Canadian dollar (CAD) yesterday evening.
Instead, the ‘loonie’ fell jointly with USD, due to CAD’s positive trading relationship with the ‘greenback’.
With Canadian economic data in short supply today, a weakened USD and oil price dynamics may continue driving CAD movement.
Data Releases
12th Jul 08:30 NZD Business PMI (Jun) 46.8
12th Jul 22:30 USD Producer Price Index (Jun) 0.1%