Australian dollar (AUD) strengthens despite mixed jobs data
Cautious trading conditions initially saw the Australian dollar (AUD) edge lower on Thursday morning, before some mixed jobs data lifted the ‘Aussie’ against its peers.
While domestic unemployment ticked higher to 4.1% in June, an increased participation rate signalled ongoing tightness in the Australian labour market. Economists argued that this could prompt a continually restrictive stance from the Reserve Bank of Australia (RBA), thereby boosting AUD.
Today, a lack of Australian data could see the acutely risk-sensitive currency left vulnerable to global risk dynamics.
New Zealand dollar (NZD) falters amid increased RBNZ rate cut bets
In the wake of New Zealand’s recent cooler-than-forecast inflation report, Reserve Bank of New Zealand (RBNZ) interest rate cut speculation weighed on the New Zealand dollar (NZD) throughout Thursday’s session.
As major banking groups, such as the ANZ, suggested that monetary loosening could occur as soon as November, the ‘kiwi’ trended lower.
Turning to today, domestic data is in short supply. Therefore, risk appetite and RBNZ policy expectations could influence NZD movement.
Pound (GBP) stumbles amid cooling UK wage growth
The pound (GBP) retreated from its recent winning streak on Thursday afternoon amid signs of easing in the UK labour market.
While unemployment held steady at 4.4%, wage growth slowed to a two-year low, reviving bets that the Bank of England (BoE) could lower interest rates in August. However, Wednesday’s stickier-than-forecast services inflation cushioned GBP’s losses, with some analysts arguing that a September rate cut remained more likely.
Looking ahead, the UK’s latest retail data is due for release this afternoon. Could a sharp decline in retail activity last month sink Sterling?
Euro (EUR) dented by ECB rate hold
The euro (EUR) fell overnight as the European Central Bank (ECB) delivered a widely anticipated hold on interest rates.
Highlighting the central bank’s data-driven approach, ECB President Christine Lagarde’s tepid remarks left EUR exposed to losses, as she stated that September’s rate decision remains ‘wide open’.
Looking ahead, a lack of high-impact releases in the bloc could see Germany’s producer price index pulled into focus today. Further signs of disinflation in the Eurozone’s largest economy could undermine EUR.
US dollar (USD) rebounds despite weak jobs data
The US dollar (USD) climbed higher overnight after entering oversold conditions, despite further signs of cooling US employment.
The latest American initial jobless claims report printed significantly higher than forecast, pointing to ongoing slack in the US labour market. However, markets largely shrugged off the downbeat release, allowing the ‘greenback’ to rise against its weaker peers.
This morning, Federal Reserve policymakers Michelle Bowman and Mary Daly are due to speak. Should the rate-setters strike a convincingly hawkish tone, USD could strengthen.
Canadian dollar (CAD) mixed amid data lull
The Canadian dollar (CAD) traded in a wide range on Thursday amid a lack of fresh economic data.
Today, a forecast decline in Canadian retail activity could leave the ‘loonie’ on the back foot, while waning oil prices could further stymie the crude-driven Canadian dollar.
Data Releases
19th Jul 08:05 USD Fed Daly Speech
19th Jul 09:45 USD Fed Bowman Speech
19th Jul 16:00 EUR German PPI (Jun) 0.1%
19th Jul 16:00 GBP Retail Sales (Jun) -0.4%
19th Jul 22:30 CAD Retail Sales (May) -0.6%
19th Jul 22:30 CAD PPI (Jun) 0.2%