Australian dollar (AUD) craters amid US-China trade war fears
The Australian dollar (AUD) collapsed at the end of last week, with AUD exchange rates plummeting over 3% through Friday’s trading session.
The sharp plunge in AUD followed China’s announcement of a 34% retaliatory tariff on US goods, escalating the trade war between the world’s two largest economies and weighing heavily on the ‘Aussie’ amid fears this would spill over into Australia’s economy.
Turning to this week’s session, it’s likely the Australian dollar will face an uphill battle so long as trade tensions continue to dominate headlines.
New Zealand dollar (NZD) tumbles amid market turmoil
The New Zealand dollar (NZD) was also met by heavy losses at the end of last week amid the sharp deterioration in risk appetite resulting from the US trade tariffs.
Much like the ‘Aussie’, expect the ‘kiwi’ to struggle today amid ongoing trade war jitters.
Pound (GBP) slides as UK hints at US tariff retaliation
The pound (GBP) found itself on the back foot against many of its peers at the end of last week.
This pullback in GBP exchange rates appeared linked to waning hopes for a UK-US trade deal, as the UK government took the first steps towards retaliating against Trump’s protectionist trade policies.
UK economic data is in short supply today, which may see Sterling remain on the defensive if market risk appetite remains
Euro (EUR) underpinned by skittish market mood
The euro (EUR) trended broadly higher on Friday as ongoing market turmoil bolstered demand for the safe-haven currency.
However, tempering these gains was Germany’s latest factory orders data, which fell short of expectations and reported order growth flatlined in February.
The start of this week sees the publication of the Eurozone’s latest retail sales figures. If sales growth rebounded as expected in February, it may provide some support for the single currency.
US dollar (USD) rebounds on impressive payroll figures
Trade in the US dollar was mixed at the end of last week, with the ‘greenback’ initially retreating against most of its other safe-haven peers but recouping some of yesterday’s losses against more risk-sensitive currencies.
However, the ‘greenback’ was able to bounce back later in the session after the latest US payroll figures smashed expectations.
Canadian dollar (CAD) falls as oil prices tumble
The Canadian dollar (CAD) retreated on Friday, with the commodity-linked currency being undermined by another sharp decline in oil prices as well as a rise in domestic unemployment last month.
Looking ahead, the direction of the ‘loonie’ may remain tied to oil price dynamics at the start of this week. If crude prices continue to decline, the CAD selloff is likely to remain firmly in place.
Data Releases
16:00 EUR German Industrial Production (Feb)
19:00 EUR Retail Sales (Feb)