Australian dollar (AUD) softens as market mood sours
The Australian dollar (AUD) had enjoyed a positive start to the week, as Labor’s election victory helped reinforce a sense of political stability in Australia.
However, a souring market mood then saw the ‘Aussie’ trend lower on Tuesday as investors avoided the risk-sensitive currency.
Australia’s latest Ai Group industry index could impact AUD today. Another gloomy reading in April may pressure the ‘Aussie’.
New Zealand dollar (NZD) rangebound in absence of data
The New Zealand dollar (NZD) fared better than the ‘Aussie’ yesterday, with NZD moving mostly sideways despite a lack of data and fading appetite for risk.
New Zealand’s latest jobs data could impact the currency today, with an uptick in unemployment earlier this morning potentially weighing on NZD.
Pound (GBP) climbs amid general optimism
The pound (GBP) pushed higher yesterday amid a slightly brighter outlook for the UK economy.
News of a UK-India trade deal cheered investors, along with hopes for a UK-EU agreement. In addition, an upbeat impact assessment of the government’s planning and infrastructure reforms may have also boosted the pound’s appeal.
Sterling could find itself subdued today amid an ongoing lack of data ahead of the Bank of England (BoE) interest rate decision on Thursday.
Euro (EUR) muted amid German political uncertainty
The euro (EUR) was mixed yesterday, with political uncertainty in Germany putting some pressure on EUR after Chancellor-Designate Friedrich Merz failed to secure the majority needed to officially become Chancellor.
However, Merz managed to win the second vote in the evening which, paired with a decline in the US dollar (USD), spared EUR from losses.
An expected rise in German factory orders in March could support the euro later today, although a stalling of Eurozone retail sales growth in the same month may offset any gains.
US dollar (USD) weakens amid continued tariff anxiety
The US dollar came under pressure yesterday amid ongoing concerns about the impact of tariffs on the US economy.
Fears were underscored by the latest US trade data, which showed the deficit hitting a record $140.5bn in March as companies stockpiled ahead of the implementation of tariffs.
Today the US dollar could face muted movement as investors await the Federal Reserve’s imminent interest rate decision.
Canadian dollar (CAD) undermined by recession warning
The crude-linked Canadian dollar (CAD) was mixed yesterday, as an uptick in oil prices was offset by a report from ratings agency Fitch, which forecasts Canada falling into recession this year due to its trade war with the US.
With CAD data thin on the ground today, oil price dynamics may drive CAD movement.
Data releases
08:45 NZD Unemployment Rate (Q1)
09:00 AUD Ai Group Industry Index (Apr)
16:00 EUR German Factory Orders (Mar)
19:00 EUR Retail Sales (Mar)