Australian dollar (AUD) slides amid risk aversion
The Australian dollar (AUD) softened yesterday as a decline in Australian business confidence and a risk-off mood both pressured AUD.
The ‘Aussie’ faced further headwinds in the evening after Donald Trump increased tariffs on Canadian steel and aluminium from 25% to 50%, driving further risk aversion.
With Australian data absent from the calendar today, market risk dynamics could continue to influence AUD exchange rates. Will a gloomy mood see the ‘Aussie’ dollar fall further?
New Zealand dollar (NZD) falls as sentiment sours
The New Zealand dollar (NZD) also weakened yesterday as the deteriorating market mood weighed on the risk-sensitive ‘kiwi’.
Turning to today, risk appetite could continue to be the primary driver behind NZD movement.
Pound (GBP) firms as trade worries hit other currencies
The pound (GBP) rose against many of its rivals yesterday, as concerns about escalating trade tensons continued to weigh on other currencies more than GBP.
With the UK expected to be relatively unaffected by US tariffs and retaliatory measures, Sterling was able to gain ground.
UK economic data remains in short supply today. As a result, GBP movement may remain tied to wider market trends.
Euro (EUR) rises as USD declines
The euro (EUR) strengthened yesterday, with the single currency enjoying its strong negative correlation with the embattled US dollar (USD).
In addition, a risk-off market mood helped the safer euro attract support.
European Central Bank (ECB) President Christine Lagarde is due to speak tonight. Any hints that future rate cuts could be at a slower pace may support the common currency.
US dollar (USD) weakens as recession fears simmer
The US dollar stumbled yesterday amid ongoing concerns that the American economy could experience a downturn, due to trade war fears and cuts to federal spending.
In the evening, the ‘greenback’ faced ongoing pressure as Trump announced higher tariffs on Canada, raising concerns that trade tensions will continue to escalate.
Attention now turns to the latest US consumer price index due out tonight. If American inflation cooled last month, as expected, the US dollar could face fresh losses.
Canadian dollar (CAD) slumps amid increased US tariffs
The Canadian dollar (CAD) plunged yesterday after Donald Trump doubled tariffs on Canadian steel and aluminium to 50%, while threatening further tariffs on Canadian carmakers.
Tonight we could see the ‘loonie’ fall even further, as the Bank of Canada (BoC) is poised to cut interest rates for the seventh time since it started its easing cycle in June 2024.
Data releases
18:45 EUR ECB President Lagarde Speech
22:30 USD Inflation Rate (Feb)
23:45 CAD BoC Interest Rate Decision
23:45 EUR ECB Nagel Speech