Australian dollar (AUD) slides in risk-off trade
The Australian dollar (AUD) faltered on Monday, weighed down by a cautious market mood that dampened demand for risk-sensitive assets.
Persistent concerns over the potential impact of Donald Trump’s tariffs on global economic growth and ongoing geopolitical uncertainties left investors seeking safe-haven assets.
Looking ahead, the ‘Aussie’ may have the opportunity to recover later today, amid forecasts data will show Australian business sentiment rebounded in December.
New Zealand dollar (NZD) dented by cautious market mood
The New Zealand dollar (NZD) also trended lower yesterday with bearish investor sentiment weighing on the appeal of the risk-sensitive currency.
NZD exchange rates are likely to remain tied to market risk dynamics today, potentially leading to further losses for the ‘kiwi’ if the mood remains downbeat.
Pound (GBP) buoyed by UK economic optimism
The pound (GBP) got off to a positive start this week, rising amid renewed optimism that the UK government will be able to boost growth by revising planning rules.
The upside in Sterling came despite Morgan Stanley cutting its UK growth forecast for 2025 from 1.3% to 0.9%.
With UK data in short supply today, the pound may be left at the mercy of wider market trends. A cautious mood could see the currency relinquish some of its recent gains.
Euro (EUR) firms as German business sentiment improves
The euro (EUR) trended broadly higher on Monday, on the back of surprisingly positive German economic data.
The latest IFO business climate index reported that business sentiment unexpectedly improved this month, against forecasts it would have held at its worst levels since the start of the COVID pandemic.
EUR investors will look to a speech by European Central Bank (ECB) President Christine Lagarde for fresh impetus today. A dovish tone could drag on the euro ahead of the bank’s interest rate decision on Thursday.
US dollar (USD) slips as Trump tariff fears wane
Trade in the US dollar (USD) was choppy at the start of this week, with the currency’s initial gains evaporating as President Trump reversed course on his decision to slap heavy tariffs on Colombia.
USD investors also seemed reluctant to make any aggressive bets ahead of the Federal Reserve’s upcoming interest rate decision.
Coming up, the US will publish its latest durable goods orders data later today. If order growth rebounded as forecast last month, it could bolster the ‘greenback’.
Canadian dollar (CAD) undermined by falling oil prices
The Canadian dollar (CAD) faced resistance on Monday as the appeal of the commodity-linked currency was weakened by a softening of oil prices.
In the absence of any notable domestic data, the ‘loonie’ may remain sensitive to oil price dynamics today.
Data Releases
10:30 AUD Business Confidence (Dec)
23:30 USD Durable Goods Orders (Dec)
03:00 EUR ECB Lagarde Speech