Australian dollar (AUD) dented by lingering Chinese economy concerns
The Australian dollar (AUD) fell to multi-week lows yesterday as China’s weaker-than-forecast GDP release continued to weigh on the ‘Aussie’, due to its status as a proxy currency for the Chinese economy.
A sour market mood placed additional pressure on the risk-sensitive currency overnight, while wavering iron ore and coal prices further stymied the commodity-linked ‘Aussie’.
Turning to today, Australian data is in short supply. Therefore, risk appetite and commodity prices could continue to drive AUD.
New Zealand dollar (NZD) wavers lower amid data lull
The New Zealand dollar (NZD) fluctuated lower yesterday, striking multi-month lows against some peers, as a lack of data left the ‘kiwi’ vulnerable to losses.
This morning New Zealand’s latest inflation data is due for release, with economists expecting inflation to have eased from 4% to 3.5% in the second quarter. Could Reserve Bank of New Zealand (RBNZ) interest rate cut bets see the ‘kiwi’ test new multi-month lows?
Pound (GBP) rangebound ahead of British CPI
The pound (GBP) was largely muted yesterday as investors braced for the UK’s latest batch of inflation data.
Meanwhile, market research firm Kantar revealed that UK grocery inflation had eased to 1.6% in June, nearing a three-year low. This added to market expectations that the Bank of England (BoE) could begin to lower interest rates next month.
Looking ahead, the UK’s vital consumer price index is due for release this afternoon. With inflation forecast to slip below the central bank’s 2% target rate, ramped-up BoE rate cut bets could hammer the pound.
Euro (EUR) undermined by weakened German outlook
The euro (EUR) struggled to attract investor support on Tuesday evening following Germany’s latest ZEW economic sentiment indicator.
The index fell more than forecast, dropping to a four-month low of 41.8 in July. ZEW economists noted that falling exports, French political turbulence and an unclear monetary policy path from the European Central Bank (ECB) were liable for this month’s dismal outlook.
Amid a lack of more impactful releases, the Eurozone’s finalised inflation data may be the focus today. Confirmation of cooling price pressures in the bloc could dent EUR.
US dollar (USD) lifted by upbeat retail data
The US dollar (USD) initially faltered yesterday amid a fluctuating market sentiment and a mixed response to overnight comments from Federal Reserve Chair Jerome Powell.
However, USD was later able to rebound on Tuesday night, as an upward revision to May’s retail sales data slightly dampened expectations of imminent monetary unwinding from the Fed.
Tonight, speeches from Fed policymakers Ted Barkin and Christopher Waller may drive USD movement. Could hawkish remarks lift USD?
Canadian dollar (CAD) muted despite easing CPI
The Canadian dollar (CAD) was rangebound on Tuesday as markets shrugged off a cooler-than-forecast Canadian consumer price index.
A strengthening ‘greenback’ propped the ‘loonie’ up, due to the currency pairing’s positive correlation.
Today, a lack of economic data could leave the crude-linked currency vulnerable to oil price fluctuations.
Data Releases
17th Jul 08:45 NZD Inflation Rate (Q2) 3.5%
17th Jul 16:00 GBP Inflation Rate (Jun) 1.9%
17th Jul 19:00 EUR Inflation Rate (Jun) 2.5%
17th Jul 23:00 USD Fed Barkin Speech
17th Jul 23:35 USD Fed Waller Speech