Australian dollar (AUD) climbs amid budget announcement
The Australian dollar (AUD) strengthened yesterday as AUD investors responded positively to Australia’s federal budget, which included tax cuts and spending pledges.
In addition, an improving global market mood boosted demand for the risk-sensitive ‘Aussie’ in the evening. Hopes that a new Black Sea deal between Russia and Ukraine could pave the way for a ceasefire cheered investors.
Turning to today, this morning’s monthly inflation indicator could impact the ‘Aussie’. If inflation held steady in February, it could dampen bets on more Reserve Bank of Australia (RBA) interest rate cuts and therefore support AUD.
New Zealand dollar (NZD) eventually firms as mood improves
After a muted session yesterday, the New Zealand dollar (NZD) eventually managed to attract some support overnight as the market mood improved.
With New Zealand economic data in short supply today, market risk dynamics could drive NZD. If the mood remains upbeat, the ‘kiwi’ could climb.
Pound (GBP) muted by downbeat sales data
The increasingly risk-sensitive pound (GBP) was mixed during yesterday’s European session, as the cheery market mood saw it firm against safer peers while struggling against riskier rivals.
Meanwhile, a larger-than-expected slump in sales volumes reported by the Confederation of British Industry (CBI) stifled the pound’s upside potential, and the looming Spring Statement muted GBP.
While signs of stubborn inflation in the UK could lend GBP support this evening, investors may instead focus on the Chancellor’s Spring Statement overnight. Gloomy growth forecasts and fresh spending cuts could weigh heavily on the pound.
Euro (EUR) subdued despite positive German data
The euro (EUR) softened against its stronger rivals yesterday, despite Germany’s latest business climate indicator improving to an eight-month high in March.
A risk-on mood put some pressure on the safer euro, with the single currency struggling to attract support in spite of the upbeat German data and hopes of a breakthrough in Russia-Ukraine peace efforts.
The session ahead brings no notable Eurozone economic releases. Therefore, EUR may be driven by wider market trends and ongoing ceasefire negotiations in Ukraine.
US dollar (USD) slides amid risk-positive trade
The US dollar (USD) faced selling pressure yesterday as an improving market mood sapped demand for the safe-haven ‘greenback’.
In addition to signs of progress in Russia-Ukraine peace talks, markets were also relieved by the possibility that US President Donald Trump may take a less aggressive approach to tariffs.
Tonight, the latest US durable goods orders figure is due out. An expected 1% contraction last month could weigh on USD.
Canadian dollar (CAD) unclear as oil prices waver
The crude-linked Canadian dollar (CAD) traded without a clear directional bias yesterday as wavering oil prices left the ‘loonie’ rudderless.
With CAD data absent from the calendar today, oil price fluctuations may continue to influence the Canadian dollar.
Data releases
10:30 AUD Monthly CPI Indicator (Feb)
17:00 GBP Inflation Rate (Feb)
22.30 GBP Spring Statement
22:30 USD Durable Goods Orders (Feb)