Australian dollar (AUD) tumbles amid PBoC rate reduction
Due to its status as a proxy currency for the Chinese economy, the Australian dollar (AUD) tanked on Monday morning, as the People’s Bank of China (PBoC) unexpectedly reduced its Loan Prime Rate by 10 basis points.
The PBoC enacted its first interest rate change in almost a year following a weaker-than-forecast GDP report last week, in an effort to jumpstart the Chinese economy.
Turning to today, domestic releases are in short supply. Therefore, the ongoing market response to the PBoC’s rate cut could continue to influence AUD movement.
New Zealand dollar (NZD) sinks despite increased trade surplus
The New Zealand dollar (NZD) fell in tandem with its Australian counterpart on Monday, due to its positive trading correlation with the ‘Aussie’.
AUD’s downside offset an unexpected expansion in New Zealand’s trade surplus last month, leaving the ‘kiwi’ to extend its recent losing streak, as it fell to fresh multi-month lows against some of its peers.
Today, a lack of New Zealand data could see the acutely risk-sensitive currency left vulnerable to market risk dynamics.
Pound (GBP) mixed amid data lull
The pound (GBP) traded without a clear direction against its peers on Monday amid a data-light start to the week.
In the absence of British economic data, commentary from UK Chancellor Rachel Reeves weighed on Sterling. Reeves suggested that public sector workers could receive an above-inflation pay rise, raising concerns about government spending.
The UK calendar is bare once again today. GBP may therefore trade in a narrow range.
Euro (EUR) wavers amid lack of data
The euro (EUR) fluctuated on Monday amid an ongoing lull in notable Eurozone data.
This saw the common currency propped up by recent remarks from European Central Bank (ECB) policymaker Gabriel Makhlouf, as he stated that there was ‘no rush’ to enact the central bank’s next interest rate cut.
This evening, the focus for EUR investors will likely be a speech from ECB Chief Economist Philip Lane. Should Lane strike a dovish tone, the common currency could face selling pressure.
US dollar (USD) subdued amid data-light calendar
Thin trading conditions saw the US dollar (USD) wobble against its rivals on Monday, amid a lack of macroeconomic releases in North America.
Shifting Federal Reserve interest rate cut bets continued to apply light downside pressure to the ‘greenback’, while a cautiously upbeat market sentiment and retreating US Treasury bond yields further stymied USD’s upside potential.
With US data in short supply once again on Tuesday, the US dollar could be driven by risk appetite and Fed policy expectations.
Canadian dollar (CAD) falters amid oil downtick
The crude-tied Canadian dollar (CAD) softened on Monday as falling oil prices weighed on the ‘loonie’ overnight.
Today, a lack of Canadian data could see oil price fluctuations drive movement. However, CAD investors may be reluctant to place any aggressive bets ahead of the Bank of Canada’s (BoC) looming interest rate decision.
Data Releases
23rd Jul 17:00 EUR ECB Lane Speech