Australian dollar (AUD) slides in downbeat trade
The Australian dollar (AUD) slipped at the end of last week even as the latest domestic PMI data surpassed expectations.
Despite the positive data, AUD was undermined by a negative shift in market risk appetite.
In the absence of any notable domestic data, movement in the ‘Aussie’ is likely to remain tied to market risk dynamics today.
New Zealand dollar (NZD) sidelined by risk-off flows
The New Zealand dollar (NZD) also struggled on Friday as the cautious market mood sapped the appeal of the risk-sensitive ‘kiwi’.
With some initial fears around retail sales dropping, there was a drop and pop in the rates, with some potential for a further increase due to the positive nature of the data. It was also further reported that the RBNZ is unlikely to waiver from its path of easing rates by another 25bps next meeting.
Pound (GBP) wavers following mixed data
Trade in the pound (GBP) was a little uneven at the end of last week, as a result of some mixed UK economic data.
While UK retail sales smashed expectations, and February’s preliminary services PMI also beat forecasts, UK tax receipts proved underwhelming, raising fresh fears over potential tax hikes or spending cuts.
GBP investors are likely to look to speeches by Bank of England (BoE) policymakers Clare Lombardelli and Dave Ramsden for fresh impetus today. A dovish consensus could see the pound come under pressure.
Euro (EUR) pressured by weaker-than-expected PMIs
The euro (EUR) faced headwinds at the end of last week as the Eurozone’s own PMI figures fell short of expectations.
Friday’s data reported Eurozone private sector growth all but stalled this month, raising fresh concerns over the bloc’s economic trajectory and stoking European Central Bank (ECB) interest rate cut bets.
Coming up, Germany will publish its latest Ifo business climate index later today. Could another improvement in business morale help the euro mount a comeback?
US dollar (USD) gains countered by disappointing PMIs
The US dollar (USD) was initially supported on Friday as a cautious market mood saw investors favour the safe-haven currency.
However, the ‘greenback’ was forced to relinquish the bulk of these gains by the end of the session after the latest US S&P PMIs printed well below forecast.
US economic data is in short supply today, likely leaving movement in the US dollar to be driven by any headlines emerging from the Oval Office.
Canadian dollar (CAD) firms despite falling oil prices
The Canadian dollar (CAD) traded with modest gains on Friday, with the commodity-linked currency seemingly unfazed by a softening of oil prices.
Coming up, a speech by Bank of Canada (BoC) Deputy Governor Toni Gravelle could exert pressure on the ‘loonie’ later today, if he signals more monetary easing is needed.
Data releases
07:45 NZD Retail Sales (Q4)
19:00 EUR German Ifo Business Climate (Feb)
19:00 GBP BoE Lomardelli Speech
20:00 EUR Inflation Rate (Jan)
23:15 CAD BoC Gravelle Speech
23:15 GBP BoE Ramsden Speech