Australian dollar (AUD) underpinned by China stimulus hopes
The Australian dollar (AUD) rebounded from a multi-year low at the start of this week amid a market correction.
This correction was underpinned by reports that Beijing was discussing fresh stimulus measures to help protect the Chinese economy from US President Donald Trump’s tariffs.
Coming up, Australia will publish its latest consumer and business confidence figures today. If morale continues to deteriorate, it could place the ‘Aussie’ back under pressure.
New Zealand dollar (NZD) rises as China hopes cheer investors
The New Zealand dollar (NZD) also rallied on Monday amid hopes that China’s stimulus measures will help to cushion the impact of Trump’s tariffs in the Asia-Pacific region.
Movement in the ‘kiwi’ is likely to depend on market sentiment today, with NZD exchange rates potentially weakening if investors remain wary amid the ongoing market slump.
Pound (GBP) slides on UK-US trade deal doubts
The pound (GBP) faced headwinds at the start of this week amid suggestions that a UK-US trade agreement may prove more elusive than previously hoped.
Despite efforts to secure an exemption from the tariffs, it seems increasingly likely the UK government will now respond with its own tariffs, potentially escalating trade tensions and making a deal more challenging.
Looking ahead, Sterling sentiment is likely to remain downbeat so long as the feasibility of a UK-US trade deal remains in doubt.
Euro (EUR) bolstered by rebound in retail sales
The euro (EUR) accelerated on Monday, with the single currency attracting support from skittish investors.
This uptick in the single currency was further supported by a rebound in Eurozone retail sales, even if sales growth ultimately fell short of expectations.
Turning to today’s session, EUR investors may look to a speech by European Central Bank (ECB) Vice-President Luis de Guindos for fresh impetus. If he strikes a dovish tone in light of Trump’s tariffs, the euro may relinquish some of its recent gains.
US dollar (USD) supported by safe-haven flows
The US dollar (USD) traded positively against many of its peers yesterday as the ongoing rout in equity markets saw investors favour safe-haven assets.
However, the ‘greenback’ struggled to replicate this success against other safe-haven currencies amid growing bets the US economy will slip into recession this year.
With the focus likely to remain on Trump’s tariffs, it’s likely we will see this trend persist through today’s session.
Canadian dollar (CAD) softens as oil price selloff continues
The Canadian dollar (CAD) stumbled on Monday as the commodity-linked currency continued to be undermined by falling oil prices.
Expect this downtrend in the ‘loonie’ to persist today, so long as crude prices remain under pressure.
Data releases
10:30 AUD Consumer Confidence (Apr)
11:30 AUD Business Confidence (Mar)
19:00 EUR ECB de Guindos Speech