Australian dollar (AUD) undermined by slump in Chinese exports
Trade in the Australian dollar (AUD) was mixed at the start of this week. Supporting AUD exchange rates was an improvement in market risk appetite.
However, these gains were tempered in the face of China’s latest trade balance amid a worrying drop in imports, particularly for coal, one of Australia’s main exports to China.
Today’s session sees the publication of the minutes from the Reserve Bank of Australia’s (RBA) latest policy meeting. If the minutes suggest policymakers remain reluctant to cut interest rates, the ‘Aussie’ may strengthen.
New Zealand dollar (NZD) bolstered by positive risk flows
The New Zealand dollar (NZD) trended higher through Monday’s trading session as an upbeat market mood underpinned the currency.
Domestic data remains in short supply today, likely leaving the ‘kiwi’ sensitive to market risk appetite.
Pound (GBP) buoyed by UK-US trade deal hopes
The pound (GBP) strengthened yesterday as the increasingly risk-sensitive currency also benefitted from the improvement in market sentiment
Aiding Sterling’s ascent was fresh optimism that the UK could soon reach a deal with the US to secure an exemption from tariffs.
The release of the UK’s latest jobs data will be in focus for GBP investors today. Expect the pound to falter if signs of a cooling labour market reinforce bets for a Bank of England (BoE) rate cut next month.
Euro (EUR) slips amid profit-taking
The euro (EUR) stumbled on Monday as a bout of profit-taking undermined the currency.
EUR exchange rates have surged over the past couple of weeks amid widespread weakness in the US dollar (USD), with EUR investors taking the opportunity to book some of their recent profits ahead of the European Central Bank’s (ECB) rate decision later this week.
The euro may be met by additional selling pressure today as Germany’s latest ZEW economic sentiment index is forecast to report morale deteriorated rapidly this month.
US dollar (USD) pressured by tariff uncertainty
The US dollar stumbled out of the gate this week after social posts from US President Donald Trump stoked confusion over US trade policy.
The posts appeared to contradict reports that emerged over the weekend suggesting smartphones and other electronics would be exempt from Trump’s 145% tariffs on Chinese imports.
USD investors may continue to unwind their positions through the coming session if this uncertainty continues to feed into a wider dollar confidence crisis.
Canadian dollar (CAD) slips despite rising oil prices
The Canadian dollar (CAD) softened on Monday despite a modest rebound in oil prices.
Canada’s latest consumer price index may support the ‘loonie’ today, if another strong inflation print bolsters hawkish expectations for the Bank of Canada’s (BoC) interest rate decision on Wednesday.
Data releases
11:30 AUD RBA Minutes
16:00 GBP Unemployment Rate (Feb)
16:00 GBP Wage Growth (Feb)
19:00 EUR German ZEW Economic Sentiment (Apr)
22:30 CAD Inflation Rate (Mar)