Australian dollar (AUD) retreats amid mixed market mood
An improving market sentiment initially lifted the risk-sensitive Australian dollar (AUD) on Tuesday.
However, AUD ultimately stalled against its rivals amid a lack of fresh data and a shifting market mood.
Looking ahead, Australia’s monthly consumer price index is expected to report a deceleration of inflation in August. Could this lead to a paring of Reserve Bank of Australia (RBA) interest rate hike bets pressure the ‘Aussie’ this morning?
New Zealand dollar (NZD) falters amid lull in data
The New Zealand dollar (NZD) struggled to find a clear direction yesterday, as a data-light calendar and a tepid market mood deterred investor interest in the ‘kiwi’.
New Zealand data is thin on the ground today, which could see NZD move in tandem with its antipodean counterpart. Could easing Australian price pressures weigh on the ‘kiwi’ today?
Pound (GBP) firms despite downbeat retail data
The pound (GBP) initially stumbled on Tuesday evening following a worse-than-forecast distributive trades report by the Confederation of British Industry (CBI).
However, Sterling managed to post some modest gains overnight amid growing expectations that the Bank of England (BoE) could enact a less aggressive policy-easing cycle than that of other major central banks.
Turning to today, a lack of fresh UK data may see GBP struggle to find a clear direction.
Euro (EUR) pressured by weak German growth
The euro (EUR) faced headwinds on Tuesday following confirmation that the German economy shrank by 0.1% throughout the second quarter.
Additionally, a worse-than-forecast GfK consumer confidence indicator in Germany stoked concerns about the health of the Eurozone’s largest economy, deterring investor interest in the single currency.
This evening, Eurozone data is in short supply. This may leave EUR to trade sideways.
US dollar (USD) undermined by Fed rate cut bets
The US dollar continued to hold close to one-year lows on Tuesday amid a lack of notable US data.
An absence of American releases saw ramped-up Federal Reserve rate cut bets stifle USD movement. As markets brace for an aggressive monetary unwinding cycle in the months ahead, the ‘greenback’ continued to trade near recent lows.
This afternoon, Fed policymaker Christopher J Waller is due to speak. Should Waller echo the central bank’s recent dovish consensus, USD may remain on the back foot.
Canadian dollar (CAD) retreats as oil rally ends
Retreating oil prices saw the crude-linked Canadian Dollar (CAD) relinquish its recent gains on Tuesday, amid renewed concerns over supply chain shocks in the Middle East.
In the absence of any fresh Canadian data, CAD may be primarily driven by oil price dynamics today.
Data releases
27th Aug 11:30 AUD Monthly CPI Indicator (Jul) 3.4%
27th Aug 15:15 Fed Waller Speech