Australian dollar (AUD) wobbles amid deflation in China
The Australian dollar (AUD) wavered yesterday, despite a risk-on rally in markets after Donald Trump paused most of his recent sweeping tariffs.
AUD failed to find sustained gains despite an improving mood as US-China tariffs remained in place. In addition, data showing continued deflation in China last month fuelled concerns over Australia’s key trading partner.
Australian data is absent from the calendar as this week’s session comes to a close. Therefore, tariff volatility and market risk appetite may continue to impact AUD.
New Zealand dollar (NZD) climbs as risk appetite recovers
The New Zealand dollar (NZD) rose yesterday as a global rebound in market risk appetite supported the ‘kiwi’.
Risk dynamics could continue to drive NZD today, potentially leading to volatility in the New Zealand dollar.
Pound (GBP) mixed amid lack of data
The pound (GBP) faced uncertain trade on Thursday as a lack of UK data left the currency exposed to wider market trends.
This saw Sterling rally against its weaker peers while sliding against stronger rivals.
This afternoon, the UK’s latest GDP figures could support the pound. Markets expect the UK economy to have returned to growth in February.
Euro (EUR) strengthens amid EU-US trade hopes
The euro (EUR) enjoyed a strong session yesterday amid hopes that the EU may be able to secure a favourable trade deal with the US during the 90-day tariff delay.
In addition, the common currency benefitted from its strong negative correlation with the US dollar (USD), which suffered notable losses.
Looking ahead, European Central Bank (ECB) President Christine Lagarde is due to speak this evening. If she raises concerns about how US tariffs could impact the Eurozone economy, EUR may weaken.
US dollar (USD) slumps amid Trump tariff U-turn
The US dollar took a tumble yesterday after Trump backtracked on his planned tariffs. Not only did this cheer markets, depriving USD of safe-haven flows, it also raised further concerns about the credibility and consistency of US trade policy.
The ‘greenback’ then faced further losses in the evening following the latest US consumer price index. The CPI figures showed that US inflation cooled more than expected last month, thereby boosting bets on a coming interest rate cut from the Federal Reserve.
Tonight brings the latest US PPI figures and consumer sentiment index. If rising producer prices and deteriorating consumer morale fuel recession fears then USD could slide.
Canadian dollar (CAD) drops alongside oil prices
The crude-linked Canadian dollar (CAD) fell yesterday as oil prices once again dropped below $60 per barrel.
Canadian economic data continues to be in short supply today. As a result, oil prices could drive CAD exchange rates. Could a further weakening of oil prices drag the ‘loonie’ lower?
Data releases
08:30 NZD Business NZ PMI (Mar)
16:00 GBP GDP (Feb)
19:45 EUR ECB President Lagarde Speech
22:30 USD PPI (Mar)
00:00 USD Michigan Consumer Sentiment (Apr)