Australian dollar (AUD) climbs amid risk-on mood
The Australian dollar (AUD) rose yesterday as an improvement in market risk appetite boosted the risk-sensitive ‘Aussie’.
The cheery mood came in the wake of reports that US President-Elect Donald Trump is considering a softer approach on tariffs than outlined in recent weeks.
Turning to today, the latest monthly CPI indicator could lend the ‘Aussie’ some support this morning. Economists expect Australian inflation to have risen from 2.1% to 2.2% in November.
New Zealand dollar (NZD) firms as sentiment improves
The New Zealand dollar (NZD) also gained ground yesterday, with the ‘kiwi’ appreciating amid the positive market mood.
With New Zealand data in short supply today, risk appetite and AUD movement may drive NZD exchange rates.
Pound (GBP) subdued in absence of data
The pound (GBP) was subdued yesterday as a lack of UK economic data left Sterling rudderless.
As a result, GBP held steady against some of its weaker peers but slipped against AUD and NZD.
British data remains thin on the ground today, potentially leaving the pound muted once again.
Euro (EUR) struggles as CPI fails to impress
The euro (EUR) softened yesterday, with the latest Eurozone consumer price index failing to support the single currency.
The CPI printed as expected, with inflation accelerating from 2.2% to 2.4% in December. Following the surprisingly sharp rise in German inflation released on Monday, Tuesday’s Eurozone figures disappointed EUR investors.
Looking ahead, lacklustre German factory orders and retail sales could pressure EUR this evening. An expected decline in Eurozone economic sentiment could add to the euro’s headwinds later tonight.
US dollar (USD) recovers as PMI beats expectations
The US dollar (USD) weakened yesterday amid the risk-on market mood and hopes that Trump may not enact sweeping trade tariffs when he takes office later this month.
USD was then able to rebound overnight as the latest ISM services PMI showed a stronger-than-expected expansion in activity last month.
New US jobs data is due out tonight, including the latest ADP employment report and initial jobless claims. Signs of a steady labour market could support USD.
Canadian dollar (CAD) flat despite rising oil prices
The Canadian dollar (CAD) traded mostly sideways yesterday. While rising oil prices lent the crude-linked currency support, the resignation of Canadian Prime Minister Justin Trudeau stifled CAD’s potential.
Today, the Canadian dollar’s fortunes may be tied to oil price dynamics and CAD’s positive correlation with USD.
Data releases
10:30 AUD Monthly CPI Indicator (Nov)
17:00 EUR German Factory Orders (Nov)
17:00 EUR German Retail Sales (Nov)
20:00 EUR Economic Sentiment (Dec)
23:15 USD ADP Employment Change (Dec)
23:30 USD Initial Jobless Claims (04/Jan)