Australian dollar (AUD) boosted by RBA remarks
The Australian dollar (AUD) strengthened yesterday following hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock.
Speaking in the wake of the RBA’s interest rate decision on Wednesday, Bullock said yesterday that the bank ‘will not hesitate to raise rates if it needs to’. These remarks sent the ‘Aussie’ sharply higher.
Turning to today, Australia’s latest business confidence index is due to show an improvement in morale last month. If it prints true to forecasts, the Australian dollar could strengthen further.
New Zealand dollar (NZD) wobbles as inflation expectations ease
The New Zealand dollar (NZD) wavered yesterday after domestic business inflation expectations printed above expectations in the third quarter but still eased from 2.3% to 2%.
In addition, some lingering jitters in global markets kept risk appetite in check, thereby muting the risk-sensitive ‘kiwi’.
Today, an absence of domestic data could see the New Zealand dollar trade on market risk appetite, with any shifts in sentiment potentially driving volatility.
Pound (GBP) inches up from recent lows
After touching multi-month lows against some peers, the pound (GBP) managed to creep slightly higher during yesterday’s session.
With Sterling seemingly hitting a floor following this week’s selloff, some investors opted to pick up a bargain and buy the oversold currency.
The pound may remain muted during the final session of the week amid an ongoing lack of UK economic data.
Euro (EUR) weakens as USD rises
The euro (EUR) suffered from its strong negative correlation with the US dollar (USD) yesterday, with EUR falling as USD rose.
Additionally, the safe single currency struggled to attract support amid a slight improvement in the market mood in the evening.
Germany’s final inflation figures for July are due this afternoon. If they confirm that price pressures increased last month then EUR could firm.
US dollar (USD) underpinned by falling jobless claims
The US dollar attracted support against some of its rivals yesterday after the latest US initial jobless claims figure came in lower than expected, easing fears over the health of the American labour market.
However, the safe-haven ‘greenback’ was undermined by a risk-on market mood, which saw USD struggle against riskier rivals.
US economic data thins out as this week’s session comes to a close. As a result, risk appetite could drive most movement in the safe-haven US dollar.
Canadian dollar (CAD) softens amid muted oil prices
The crude-linked Canadian dollar (CAD) weakened against it stronger peers yesterday as muted oil prices left the ‘loonie’ lacking support.
Looking forward, the focus for CAD investors is Canada’s latest employment report, due out tonight. Could an expected rise in domestic unemployment see the ‘loonie’ stumble?
Data Releases
9th Aug 11:30 AUD NAB Business Confidence (Jul) 5
9th Aug 16:00 EUR German Inflation Rate (Jul) 2.3%
9th Aug 22:30 CAD Unemployment Rate (Jul) 6.5%