Australian dollar (AUD) rangebound as Chinese imports rise
The Australian dollar (AUD) was underpinned by positive Chinese trade data at the start of this week, with AUD investors welcoming a surprise rebound in imports last month.
However, the upside potential of the ‘Aussie’ remained limited in scope amid yesterday’s risk-averse market mood.
Australia’s latest consumer confidence index could act as a headwind for AUD exchange rates today, if January’s figures report another deterioration in sentiment.
New Zealand dollar (NZD) wavers in mixed trade
The New Zealand dollar (NZD) was also rangebound yesterday as the upbeat Chinese trade figures helped to offset the decline in market risk appetite.
Turning to today’s session, will a decline in domestic business confidence in the last quarter of 2024 drag on the ‘kiwi’?
Pound (GBP) pressured by UK bond turmoil
The pound (GBP) opened this week’s session on the back foot, falling to new multi-month lows amid another rise in UK borrowing costs.
30-year bond yields approached a three-decade high on Monday, leading to fresh fears of tax rises and spending cuts.
If the turmoil in the UK bond market persists, expect to see the Sterling selling bias remain firmly in place today.
Euro (EUR) dented by USD strength
The euro (EUR) struggled on Monday as it continued to be undermined by its negative correlation with the US dollar (USD).
Adding to the pressure on the single currency was a report showing that business confidence in the Eurozone continues to weaken.
Coming up, EUR investors will look to a speech by European Central Bank (ECB) policymaker Philip Lane for fresh impetus today, with the euro poised to fall if he strikes a dovish note.
US dollar (USD) soars on Fed rate cut uncertainty
The US dollar got off to a roaring start this week as it carried over its momentum after Friday’s payroll figures smashed expectations.
USD exchange rates soared as the bumper payroll print softened expectations the Federal Reserve might cut interest rates this year.
The spotlight today will be on the latest US producer price index. The prelude to Wednesday’s highly anticipated US consumer price index is expected to point to persistent inflationary pressures, which may further undermine Fed rate cut bets and extend the USD rally.
Canadian dollar (CAD) bolstered by rising oil prices
The Canadian dollar (CAD) firmed on Monday, with the currency drawing support from rising oil prices and its positive trading relationship with the US dollar.
If oil prices continue to accelerate, expect to see the ‘loonie’ maintain a positive trajectory today.
Data Releases
07:00 NZD Business Confidence (Q4)
09:30 AUD Consumer Confidence (Jan)
17:35 EUR ECB Lane Speech
23:30 USD PPI (Dec)