Australian Dollar (AUD) Under Pressure from Chinese Economic Concerns
The Australian dollar (AUD) is struggling to find support this week, with concerns over the slowing Chinese economy weighing heavily on the currency.
As a key trading partner, China’s weak economic data and subdued commodity prices have driven risk-averse market sentiment, keeping the AUD on the back foot.
The Reserve Bank of Australia’s cautious stance has also limited the AUD’s potential recovery.
New Zealand Dollar (NZD) Struggles Amid Global Slowdown Fears
The New Zealand dollar (NZD) remains subdued as global slowdown concerns continue to dampen market appetite for risk-sensitive assets.
Falling dairy prices, a critical export for New Zealand, are further pressuring the currency.
Additionally, the Reserve Bank of New Zealand’s dovish policy outlook has left little room for optimism regarding the NZD’s near-term performance.
US dollar (USD) steady ahead of key US inflation print
The US dollar (USD) traded in a narrow range yesterday as investors were reluctant to bid on the currency ahead of today’s US CPI print.
This resulted in limited upside for the ‘greenback’ on Tuesday, despite a cautious market mood and uptick in US Treasury yields.
Turning to today’s session all eyes will be on the latest US CPI figures, which are expected to report a cooling of inflation. August’s inflation figures may influence the size of a widely expected interest rate cut from the Federal Reserve this month so a weaker-than-expected reading may place significant pressure on the US dollar.
Pound (GBP) buoyed as UK unemployment falls
The pound (GBP) initially firmed during yesterday’s session as the UK’s latest jobs report showed that unemployment fell to a six-month low in July.
However, the upside in Sterling proved short-lived, as concerns over a slowdown in wage growth saw the pound relinquish the bulk of its gains by the afternoon.
Today’s session opened with the publication of the UK’s latest GDP figures, which are likely to influence the pound’s trajectory moving forward.
Euro (EUR) muted as German inflation slows
The euro (EUR) struggled to find momentum on Tuesday as the only EUR data of note was Germany’s latest consumer price index.
August’s finalised CPI figures confirmed that inflation slowed to just 1.9%, its lowest level since March 2021.
Looking ahead, with the European Central Bank’s (ECB) latest interest rate decision looming movement in the euro is likely to remain limited through today’s session.
Canadian dollar (CAD) weakens on BoC Macklem comments
The Canadian dollar (CAD) ticked lower on Tuesday, after Bank of Canada (BoC) Governor Tiff Macklem warned that the bank could pursue larger interest rate cuts if the data warrants it.
Coming up, the ‘loonie’ could continue to face headwinds today if oil prices continue to plunge.
Data Releases
07:00 GBP GDP (Jul)
13:30 USD Inflation Rate (Aug)