Australian dollar (AUD) capped by trade war fears
The Australian dollar (AUD) found limited success yesterday as a softer US dollar (USD) helped to bolster market sentiment and support the risk-sensitive ‘Aussie’.
However, concerns over fresh US tariffs and escalating global trade wars kept a lid on risk appetite, limiting AUD’s potential.
Australian economic data is in short supply today, potentially leaving the ‘Aussie’ to trade on risk dynamics again. Could a souring mood see AUD slide?
New Zealand dollar (NZD) enjoys limited success
The New Zealand dollar (NZD) also rose against some of its weaker peers yesterday but found its gains limited amid the shifting market mood.
Turning to today, risk appetite may remain the focus for NZD investors. If sentiment deteriorates, expect the ‘kiwi’ to soften.
Pound (GBP) capitalises on rivals’ weakness
The pound (GBP) enjoyed some success yesterday, with GBP primarily benefiting from depreciation in rival currencies.
While increasingly hostile global trade policies are expected to hit the UK economy, the country may be less badly impacted than other nations. This allowed the pound to rise against some of its peers.
Sterling could face pressure today as investors react to the latest UK retail sales report. With sales growth forecast to have contracted last month, UK economic concerns could dent GBP.
Euro (EUR) buoyed by USD decline
The euro (EUR) firmed yesterday, thanks to the common currency’s strong negative correlation with the weakening US dollar.
However, worries about worsening EU-US trade tensions and how tariffs could impact the Eurozone economy limited EUR’s upside.
Today brings a number of Eurozone releases, including the bloc’s latest economic sentiment index. Could deteriorating morale amid the escalating EU-US trade war drag on EUR?
US dollar (USD) dented by tariff concerns
The US dollar faced selling pressure yesterday as new tariffs announced by President Donald Trump fuelled fears of a possible US recession.
The safe-haven ‘greenback’ attempted to claw back some losses amid a souring market mood, but the currency was unable to recoup its losses.
Looking ahead, all eyes are on the latest core PCE price index. If the Federal Reserve’s preferred measure of inflation ticked higher last month, USD could end the week strongly.
Canadian dollar (CAD) falls as US-Canada tensions flare
The Canadian dollar (CAD) fell yesterday as Canadian Prime Minister Mark Carney called tariffs a ‘direct attack’ and vowed to respond.
Tonight, Canada’s latest GDP figures are due out. If the Canadian economy contracted last month, then CAD exchange rates could face losses.
Data releases
17:00 EUR German GfK Consumer Confidence (Apr)
17:00 GBP Retail Sales (Feb)
18:55 EUR German Unemployment Rate (Mar)
20:00 EUR Economic Sentiment (Mar)
22:30 CAD GDP (Feb)
22:30 USD Core PCE Price Index (Feb)