Australian dollar (AUD) buoyed by easing US-China trade tensions
The Australian dollar (AUD) strengthened yesterday after US President Donald Trump hinted at a possible trade deal with China.
This alleviated fears of a US-China trade war, thereby boosting the risk-sensitive ‘Aussie’.
Australia’s latest PMI surveys, released earlier this morning, could continue to impact AUD today. Weak activity among Australian businesses could pressure the ‘Aussie’ dollar.
New Zealand dollar (NZD) rises as risk appetite improves
The New Zealand dollar (NZD) also appreciated yesterday, with the improving market mood boosting demand for the risk-sensitive ‘kiwi’.
Aside from the latest trade figures released earlier, New Zealand data is in short supply today. Therefore, risk appetite may continue to impact NZD.
Pound (GBP) wobbles following CBI data
The pound (GBP) wavered without a clear direction yesterday amid the publication of the Confederation of British Industry’s (CBI) latest industrial trends orders.
Although the CBI data beat forecasts, it still showed a deeply negative reading. Additionally, GBP investors were hesitant ahead of more impactful data today.
Today we have the latest UK retail sales data and preliminary PMI surveys. While an expected recovery in sales last month could support GBP, sluggish service sector activity in February may offset any upside.
Euro (EUR) unclear on mixed data
The euro (EUR) was mixed yesterday, with a softer producer price reading from Germany dampening Eurozone inflation expectations and weighing on EUR at the start of the European session.
However, the euro’s negative correlation with the retreating US dollar (USD) and an improvement in Eurozone consumer confidence both helped to prop up the single currency.
The Eurozone PMIs this evening could provide EUR with modest support, if they show a slight acceleration in private sector activity within the bloc.
US dollar (USD) falls as market mood brightens
The US dollar weakened yesterday as an increased appetite for risk saw investors ditch the safe-haven currency.
In addition, a rise in initial jobless claims in the US last week added to the pressure on USD.
USD exchange rates may be impacted by the American S&P PMIs overnight. Although less influential than the ISM surveys, tonight’s PMIs may support the US dollar if they show another expansion in business activity.
Canadian dollar (CAD) softens amid USD weakness
The crude-linked Canadian dollar (CAD) slipped against its stronger rivals yesterday, despite rising oil prices, as CAD’s positive relation with USD undermined the ‘loonie’.
Canada’s latest retail sales figures could impact CAD exchange rates today. Will a contraction in sales growth put pressure on the Canadian dollar?
Data releases
07:45 NZD Balance of Trade (Jan)
08:00 AUD Composite PMI (Feb)
17:00 GBP Retail Sales (Jan)
19:00 EUR Composite PMI (Feb)
19:30 GBP Composite PMI (Feb)
23:30 CAD Retail Sales (Jan)
00:45 USD Composite PMI (Feb)