Australian dollar (AUD) flat as US data in focus
The Australian dollar (AUD) traded in a narrow range at the end of last week, as investors adopted a wait-and-see approach ahead of Friday’s key US employment data.
Movement in AUD was also suppressed by growing speculation the Reserve Bank of Australia (RBA) will cut interest rates later this month.
Turning to the start of this week, AUD investors will digest China’s latest inflation figures. Any signs of lingering deflation risks could stoke concerns over China’s economic outlook and drag on the ‘Aussie’.
New Zealand dollar (NZD) muted in cautious trade
The New Zealand dollar (NZD) traded sideways on Friday as a cautious market mood limited demand for the risk-sensitive currency.
NZD exchange rates are likely to remain sensitive to market risk dynamics at the start of this week. Will a pessimistic mood further limit the appeal of the ‘kiwi’?
Pound (GBP) underpinned by BoE Pill comments
The pound (GBP) ticked higher at the end of last week, following hawkish comments from Bank of England (BoE) Chief Economist Huw Pill.
Pill’s remarks suggesting the bank is in a place to declare ‘job done’ on inflation, helped to temper expectations for further easing, following the BoE’s dovish interest rate cut on Thursday.
In the absence of any notable UK economic data, the pound may struggle to find direction today.
Euro (EUR) weakens as German data disappoints
The euro (EUR) faced headwinds on Friday in response to lacklustre German industrial data.
EUR investors were alarmed by a sharper-than-expected contraction in German industrial production in December, as it stoked concerns over the trajectory of the Eurozone’s largest economy.
Eurozone data is also in short supply today, which could limit movement in the euro through today’s session.
US dollar (USD) subdued as payrolls miss
The US dollar (USD) was subdued on Friday as the latest US payroll figures made for mixed reading. While job growth was weaker than expected last month, US unemployment actually fell.
The mixed jobs data supressed USD exchange rates as investors assessed the potential impact on Federal Reserve monetary policy.
Looking ahead, USD investors may look to the White House for fresh impetus at the start of this week,
Canadian dollar (CAD) buoyed by unexpected fall in unemployment
The Canadian dollar (CAD) closed last week’s session on a positive note as a surprise fall in domestic unemployment last month helped to temper Bank of Canada (BoC) rate cut bets.
Canadian data is thin on the ground today. As a result, the ‘loonie’ is likely to track movements in oil prices.