Australian dollar (AUD) fluctuates higher following jobs report
The Australian dollar (AUD) was volatile yesterday, initially stumbling before surging higher, as markets reacted to some mixed domestic jobs data.
Although Australia’s unemployment rate unexpectedly rose in July, this was largely due to an increase in participation, as employment growth accelerated last month. Meanwhile, a risk-on mood and rising inflation expectations also boosted AUD.
The week ends with Australian economic data thin on the ground. As a result, market risk dynamics may drive most movement in the ‘Aussie’.
New Zealand dollar (NZD) struggles in wake of RBNZ cut
The New Zealand dollar (NZD) was left licking its wounds yesterday in the wake of Wednesday’s shock interest rate cut from the Reserve Bank of New Zealand (RBNZ).
An upbeat market mood helped to cushion the risk-sensitive currency’s downside, but the ‘kiwi’ was nevertheless left struggling across the board.
This morning’s New Zealand manufacturing PMI could pressure NZD today, amid signs of ongoing weakness in factory activity.
Pound (GBP) buoyed by upbeat UK GDP
The pound (GBP) attracted some bids yesterday thanks to a solid 0.6% expansion in the UK economy in the second quarter.
However, Sterling’s upside potential was limited as Wednesday’s weaker inflation reading continued to fuel expectations that the Bank of England (BoE) could cut rates again next month.
Looking ahead, Sterling could garner some support this afternoon as the UK’s latest retail sales data is forecast to show a recovery in domestic sales growth last month.
Euro (EUR) slides amid risk-on mood and USD strength
The euro (EUR) faced headwinds yesterday, with demand for the safer single currency faltering amid an increased appetite for risk.
EUR suffered further losses later in the session amid a sharp uptick in the US dollar (USD), due to the euro’s strong negative correlation with the American currency.
With Eurozone economic data remaining thin on the ground during today’s session, risk appetite and USD movement may continue to influence EUR exchange rates.
US dollar (USD) finds support as sales beat forecasts
A cheery market mood initially dampened the safe-haven US dollar’s appeal yesterday, causing it to fall against its riskier rivals.
A stronger-than-forecast 1% rebound in US retail sales in July then saw the ‘greenback’ jump higher in the evening. However, the prevailing risk-on mood remained a thorn in the US dollar’s side, and it subsequently trimmed these gains against some peers.
Looking at the session ahead, risk sentiment may continue driving USD until tonight, when an expected rise in US consumer sentiment may lend the ‘greenback’ further support.
Canadian dollar (CAD) trades alongside USD
A lack of data saw the Canadian dollar (CAD) trade in tandem with the US dollar yesterday, due to CAD’s increasingly strong correlation with USD.
The drought of Canadian data continues today, potentially leaving the ‘loonie’ to once again be influenced primarily by USD movement.
Data Releases
16th Aug 08:30 NZD Business NZ PMI (Jul) 42.5
16th Aug 16:00 GBP Retail Sales (Jul) 0.5%
17th Aug 00:00 USD Michigan Consumer Sentiment (Aug) 66.9