Australian dollar (AUD) wavers despite increased Chinese exports
A larger-than-forecast widening of China’s trade surplus saw the Australian Dollar (AUD) initially edge higher on Friday afternoon, due to AUD’s status as a proxy currency for the Chinese economy.
However, it wasn’t enough to keep the ‘Aussie’ afloat against its stronger peers, although the currency did gain ground against weaker rivals.
Looking ahead, an influx of high-impact Chinese data could drive AUD movement this afternoon. Investors may focus primarily on China’s latest GDP release, with any signs of economic slowing in the superpower economy likely to weigh on the ‘Aussie’.
New Zealand dollar (NZD) pressured by manufacturing slump
The New Zealand dollar (NZD) initially struggled to attract investor support on Friday following a sharp decline in domestic manufacturing activity in June.
The ‘kiwi’ was able to recoup its losses as the session progressed, however, as an improving appetite for risk boosted the currency.
This morning, the latest domestic services PMI is due for release, with economists anticipating another dismal reading. Could a deepening contraction in services activity weigh on the ‘kiwi’?
Pound (GBP) buoyed by improved UK growth outlook
The pound (GBP) strengthened on Friday, hitting a one-year high against the US dollar (USD), as UK growth tailwinds kept Sterling afloat.
The recent Labour election victory, stronger UK GDP data and hawkish comments from Bank of England (BoE) officials all contributed to boosting the pound’s appeal as the week came to an end.
Today, a lack of fresh releases may see Sterling largely subdued as investors brace for the UK’s inflation figures midweek.
Euro (EUR) volatile amid data lull
The euro (EUR) traded without a clear direction on Friday amid a lack of notable releases from the Eurozone.
With data in short supply, the timing of the next European Central Bank (ECB) interest rate cut was once again the focus. Analysts from Dutch financial institution ING proposed that there could be two further ECB rate cuts this year, serving to deter investor interest in the single currency.
This evening, the Eurozone’s latest industrial production data is due for release. Could slumping factory output in May pressure EUR?
US dollar (USD) stumbles amid surging Fed rate cut bets
The US dollar fell to a fresh monthly low on Friday as cooling US inflation continued to weigh on the ‘greenback’.
Ramped-up Federal Reserve interest rate cut speculation kept the currency on the back foot, as markets shrugged off a higher-than-forecast US producer price index.
Coming up, a data-light session could leave USD rudderless, as markets begin to bet on multiple Fed rate cuts this year.
Canadian dollar (CAD) tumbles in tandem with USD
The Canadian dollar (CAD) fell in tandem with a weakening USD on Friday, due to CAD’s positive trading relationship with the ‘greenback’. A marginal uptick in oil prices later failed to lend the crude-linked ‘loonie’ support.
Canadian data is in short supply today, which may see CAD left vulnerable to oil price dynamics and USD fluctuations.
Data Releases
15th Jul 08:30 NZD Services PSI (Jun) 42.8
15th Jul 19:00 EUR Industrial Production (May) -1%