Australian dollar (AUD) strengthens in upbeat trade
The Australian dollar (AUD) got off to a strong start this week as a bullish market mood bolstered the appeal of the risk-sensitive currency.
Market sentiment appeared to be bolstered by fading concerns over the US economy as well as hopes that US interest rates will soon start to come down.
Coming up, the Reserve Bank of Australia (RBA) will publish the minutes from its August policy meeting later this morning. If these highlight policymakers’ willingness to raise interest rates it could extend the upside in the ‘Aussie’.
New Zealand dollar (NZD) supported by positive market mood
The New Zealand dollar (NZD) also firmed on Monday in response to the risk-positive market mood.
This morning will see the publication of New Zealand’s latest trade figures. Economists forecast the nation’s trade surplus will have narrowed in July, potentially putting pressure on the ‘kiwi’ today.
Pound (GBP) muted amid BoE speculation
The pound (GBP) traded sideways through yesterday’s session as GBP investors continued to adjust their bets for a potential Bank of England (BoE) interest rate cut next month.
This followed a flood of high-impact UK economic data last week, which despite being mostly positive, was not enough to weaken bets for back-to-back rate cuts from the BoE.
In the absence of any UK economic data, the pound may struggle to find direction during today’s session.
Euro (EUR) subdued in risk-positive trade
The euro (EUR) was muted during yesterday’s session as the upbeat market mood limited demand for the safe-haven currency.
Furthermore, a lull in Eurozone data also left EUR investors with limited trading stimuli on Monday.
Looking ahead, the Eurozone will publish its latest consumer price index later this evening. July’s finalised figures are expected to confirm an acceleration of inflation in the bloc, which may underpin the euro.
US dollar (USD) undermined by dovish Fed remarks
The US dollar (USD) trended lower at the start of this week, with the currency striking new multi-month lows against a few of its peers.
The latest drop in the ‘greenback’ appeared linked to remarks from Federal Reserve policymaker Mary Daly, who called for a gradual cutting of US interest rates amid signs that inflation is under control.
The Fed’s Rahael Bostic and Michael Barr are set to speak later tonight. If they strike a similar tone to Daly, it may extend the USD selling bias.
Canadian dollar (CAD) muted as oil prices slide
The Canadian dollar (CAD) was muted on Monday as the appeal of the commodity-linked currency was undermined by a fall in oil prices
Coming up, Canada will publish its latest CPI figures later tonight. If inflation slows as forecast, it may stoke Bank of Canada (BoC) rate cut bets and drag on the ‘loonie’.
Data Releases
19th Aug 08:45 NZD Trade Balance (Jul) NZ$0.33bn
19th Aug 11:30 AUD RBA Minutes
19th Aug 16:30 EUR German PPI (Jul) -0.8%
19th Aug 19:00 EUR Inflation Rate (Jul) 2.6%
19th Aug 22:30 CAD Inflation Rate (Jul) 2.5%