Australian dollar (AUD) jumps on US-China trade hopes
The Australian dollar (AUD) surged higher yesterday amid hopes that the US-China trade war will not be as long or damaging as feared.
The Trump administration indicated that it expects trade tensions to ‘de-escalate’, with Donald Trump himself saying that US tariffs on China are likely to fall ‘substantially’ as the two sides negotiate an agreement.
Looking ahead, the Reserve Bank of Australia’s (RBA) latest economic bulletin could impact the ‘Aussie’ today. Could concerns about the impact of tariffs on the Australian economy dent AUD?
New Zealand dollar (NZD) climbs amid risk-positive trade
The New Zealand dollar (NZD) also rallied yesterday, as relief swept markets and boosted the risk-sensitive currency’s appeal.
Today, market risk dynamics could drive the New Zealand dollar once again. Will a continued upbeat mood support NZD?
Pound (GBP) dented by downbeat PMIs
The pound (GBP) was mixed on Wednesday, with Sterling dropping against its stronger peers during the European session following the UK’s PMIs.
The surveys showed a shock contraction in British service sector activity this month, raising concerns about the UK economy.
Sterling could face further losses today with the release of the Confederation of British Industry’s (CBI) latest surveys. If they contain signs that UK businesses are struggling, GBP could fall.
Euro (EUR) fluctuates lower amid volatile trade
The euro (EUR) witnessed volatility yesterday, trending lower overall, amid a rise in the US dollar (USD) and a risk-on market mood.
Weaker-than-forecast Eurozone PMIs also pressured EUR, with business activity in the bloc grinding to a halt this month.
Germany’s latest business climate indicator is due out later today. The euro could slide if we see a steep decline amid fears around the impact of US tariffs on the Eurozone’s largest economy.
US dollar (USD) boosted by tariff comments
The US dollar rallied yesterday morning amid hopes that the US would take steps to de-escalate its trade war with China.
However, the safe-haven ‘greenback’ then faced mixed movement in the afternoon and evening as a risk-positive market mood seemed to offset USD’s upside potential.
New orders for durable goods in the US are expected to have increased in March, which could provide the US dollar with some support.
Canadian dollar (CAD) dented by falling oil prices
The crude-linked Canadian dollar (CAD) fell against its stronger rivals yesterday, with declining oil prices putting pressure on CAD.
Canadian data remains absent from the calendar today, potentially leaving the ‘loonie’ to trade on oil price dynamics.
Data releases
11:30 AUD RBA Bulletin
18:00 EUR German Ifo Business Climate (Apr)
20:00 GBP CBI Business Optimism Index (Q2)
20:00 GBP CBI Industrial Trends Orders (Apr)
22:30 USD Durable Goods Orders (Mar)
22:30 USD Initial Jobless Claims (19/Apr)