Australian dollar (AUD) firms on strong manufacturing growth
The Australian dollar (AUD) appreciated at the start of this week, bolstered by stronger-than-expected domestic data.
Australia’s latest PMIs reported an acceleration in growth across the country’s private sector, but AUD investors were particularly impressed by the jump in manufacturing activity as it rose to its highest levels since October 2022.
Turning to today’s session the focus will be on the unveiling of the government’s latest Federal budget. If markets are receptive to the government’s spending and tax plans, the ‘Aussie’ may be able to extend its gains.
New Zealand dollar (NZD) underpinned by risk-on flows
The New Zealand dollar (NZD) firmed during Monday’s trading session, as it was buoyed by positive risk flows.
In the absence of any notable domestic data, expect to see NZD exchange rates remain sensitive to market risk dynamics, with the ‘kiwi’ likely to strengthen if the mood remains positive.
Pound (GBP) bolstered by jump in service sector activity
The pound (GBP) trended broadly higher yesterday as GBP investors welcomed the UK’s latest PMI releases.
Markets were particularly impressed by the surprise jump in the services index, with growth in the dominant sector rising to a seven-month high this month.
The Confederation of British Industry (CBI) will publish its latest distributive trends index later today. If UK retail sales volumes continue to decline, Sterling could face headwinds today.
Euro (EUR) muted as Eurozone PMIs fall short
The euro (EUR) edged lower on Monday after the Eurozone’s own PMIs fell a little short of expectations.
Weaker-than-forecast services sector growth resulted in only a very modest acceleration in private sector activity as a whole, which could encourage the European Central Bank (ECB) to deliver another interest rate cut next month.
Coming up, Germany’s latest Ifo business climate index could bolster the euro today amid expectations the country’s new spending plans will propel morale to its highest level in several months.
US dollar (USD) falls as Trump hints at tariff ‘flexibility’
The US dollar (USD) got off to a slow start this week as positive risk flows limited demand for the safe-haven currency.
This was driven by hints from US President Donald Trump that the White House may be ‘flexible’ when it implements his reciprocal tariffs on 2 April.
If this trade optimism persists, we may see the US dollar extend these losses through today’s session.
Canadian dollar (CAD) weakens amid political uncertainty
The Canadian dollar (CAD) trended lower through Monday’s trading session, with investors wary of the currency after Prime Minister Mark Carney called a snap election for 28 April.
Canadian data remains thin on the ground today, likely leaving the ‘loonie’ vulnerable to political uncertainty and oil price dynamics.
Data releases
12:00 AUD Federal Budget
19:00 EUR German Ifo Business Climate (Mar)
21:00 GBP CBI Distributive Trades (Mar)