Australian dollar (AUD) buoyed by robust Chinese trade figures
Trade in the Australian dollar (AUD) was a little erratic at the end of last week. Supporting the ‘Aussie’ were China’s latest trade figures, which reported a much smaller-than-expected decline in imports last month.
On the other hand, uncertainty over US-China trade talks infused volatility into AUD exchange rates throughout Friday’s session.
The result of these trade talks over the weekend are likely to act as the primary catalyst for movement in the Australian dollar at the start of this week.
New Zealand dollar (NZD) slips in cautious trade
The New Zealand dollar (NZD) stumbled on Friday as risk-off flows and an increasingly dour outlook for New Zealand’s economy took their toll on the ‘kiwi’.
NZD exchange rates are likely to remain tied to market risk dynamics today. Expect to see the ‘kiwi’ falter if markets remain anxious.
Pound (GBP) bolstered by trade deal optimism
The pound (GBP) closed last week’s session on a positive note, amid growing economic optimism in the UK.
This follows the recent announcement of new trade deals with India and the US, as well as hopes for a new agreement with the EU to be signed later this month.
In the absence of any notable UK economic releases, Sterling sentiment may be driven by wider market trends today.
Euro (EUR) supported by USD weakness
The euro (EUR) trended broadly higher on Friday, as it was underpinned by its strong negative correlation with the US dollar (USD).
EUR sentiment was also buoyed by hopes for a more united Europe, following the announcement of a new Franco-Polish treaty.
Notable Eurozone economic data is also in short supply at the start of this week, which may leave the euro directionless today.
US dollar (USD) shaken by trade uncertainty
The US dollar faced headwinds at the end of last week, with USD investors wary ahead of trade talks between the US and China over the weekend.
This caution was in part driven by comments from President Donald Trump, who suggested that an ‘80% tariff on China seems right’, disappointing markets who had hoped they could be reduced to at least 60%.
These trade concerns may continue to influence USD exchange rates today. This could lead the US dollar to stumble if progress towards a trade deal remains limited.
Canadian dollar (CAD) slides as unemployment rises
The Canadian dollar (CAD) also stumbled on Friday, as Canada’s latest jobs report revealed unemployment jumped to 6.9% in April as Trump’s tariffs began to take their toll.
If oil prices recover at the beginning of this week, it may pave the way for the commodity-linked ‘loonie’ to regain some lost ground.