Australian dollar (AUD) falls amid risk aversion
The Australian dollar (AUD) slid yesterday as a souring market mood weighed on the risk-sensitive currency.
The deterioration in risk appetite came as geopolitical tensions in the Middle East flared, with Israel renewing its offensive in Gaza after the ceasefire ended without an extension.
Turning to today, market-moving Australian data remains in short supply. Therefore, the market mood could continue to determine AUD movement.
New Zealand dollar (NZD) softens in gloomy trade
The New Zealand dollar (NZD) also weakened yesterday as the souring mood dampened the risk-sensitive currency’s appeal.
NZD exchange rates may also be driven primarily by risk appetite today amid a lack of notable data releases from New Zealand.
Pound (GBP) uncertain in absence of data
The pound (GBP) moved without a clear trajectory yesterday amid a lack of UK economic data.
While GBP rose against AUD and NZD, the increasingly risk-sensitive currency faced pressure elsewhere.
With the Bank of England (BoE) interest rate decision looming, Sterling could be quiet today.
Euro (EUR) capped by USD rebound
The euro (EUR) rose against its weaker peers yesterday, as Germany’s ZEW economic sentiment index beat forecasts to jump to its highest level in over five years.
However, EUR struggled to hold its gains against stronger rivals due to its negative correlation with a rebounding US dollar (USD).
Tonight, European Central Bank (ECB) Vice-President Luis de Guindos is due to speak. If he strikes a dovish tone or raises concerns about the impact of US tariffs on the Eurozone economy, EUR could face pressure.
US dollar (USD) wavers higher amid souring mood
The US dollar was volatile yesterday, with the currency suffering sudden losses at the start of the European session.
However, USD was able to rebound in the evening, with a risk-off market mood providing the currency with safe-haven flows.
USD exchange rates may be muted today as investors await the Federal Reserve’s policy announcement overnight. If the Fed raises concerns about a possible US recession, the ‘greenback’ could decline.
Canadian dollar (CAD) unclear despite accelerating inflation
The Canadian dollar (CAD) wavered yesterday, with an uptick in Canadian inflation failing to provide the currency with lasting gains.
With Canadian data absent from the calendar today, oil price movements could drive the crude-linked ‘loonie’.
Data releases
22:00 EUR ECB de Guindos Speech