Australian dollar (AUD) pressured by China economy woes
An ongoing lull in domestic data saw the Australian dollar (AUD) extend its recent losses on Tuesday amid a risk-off market mood.
A surprise interest rate cut from the People’s Bank of China (PBoC) also continued to weigh on the ‘Aussie’, due to its status as a proxy currency for the Chinese economy. The rate cut fuelled fears over China’s economic outlook.
This morning, Australia’s latest preliminary PMIs are due for release. Could decelerating services growth leave AUD on the back foot once again?
New Zealand dollar (NZD) stumbles amid data lull
The New Zealand dollar (NZD) faltered on Tuesday with fresh economic data in short supply.
NZD’s positive trading correlation with a weakened AUD and its risk-sensitive nature dragged the ‘kiwi’ lower.
Today, a lack of New Zealand data could see the acutely risk-sensitive currency left vulnerable to market risk dynamics.
Pound (GBP) wavers amid data lull
The pound (GBP) was largely subdued on Tuesday amid thin trading conditions, leaving GBP investors to mull over the likelihood of an August interest rate cut from the Bank of England (BoE).
Last week’s sticky services inflation coupled with cooling wage growth in the UK has left markets unsure whether the BoE will cut rates next month, which muted GBP yesterday.
This evening, the UK’s preliminary PMIs are due for release. Services activity is forecast to have accelerated in July, which could bolster the pound.
Euro (EUR) softens amid ECB rate cut speculation
The euro (EUR) wavered on Tuesday, slipping against its stronger rivals, amid bets on a rate cut from the European Central Bank (ECB) in September.
Later, EUR stumbled due to its negative correlation with a strengthening US dollar (USD).
This evening, the focus for EUR investors will likely be the Eurozone’s preliminary PMIs for July. Increased services activity this month could lend the common currency support.
US dollar (USD) strengthens amid downbeat trade
The safe-haven US dollar edged higher yesterday as gloomy trading conditions permeated global markets.
However, a lack of fresh US data coupled with retreating US Treasury bond yields prevented a sharp ascent for the ‘greenback’.
Tonight, the latest US services PMI is due for release. Economists expect the index to retreat from a two-year high in July, which could hamper USD exchange rates.
Canadian dollar (CAD) mixed amid lack of data
The Canadian dollar (CAD) traded without a clear direction on Tuesday amid an absence of economic data.
The crude-tied ‘loonie’ was able to shrug off waning oil prices overnight, as it moved jointly with a rising US dollar.
Looking forwards, the Bank of Canada (BoC) is due to deliver its latest interest rate decision overnight. An expected rate cut could see CAD slump.
Data Releases
24th Jul 09:00 AUD Services PMI (Jul) 50.9
24th Jul 16:00 EUR German GfK Consumer Confidence (Aug) -21
24th Jul 18:00 EUR Services PMI (Jul) 53
24th Jul 18:30 GBP Services PMI (Jul) 52.5
24th Jul 23:45 CAD BoC Interest Rate Decision 4.5%
24th Jul 23:45 USD Services PMI (Jul) 54.4