Australian dollar (AUD) climbs on positive data
The Australian dollar (AUD) rallied yesterday after the latest consumer and business confidence reports both exceeded expectations.
In addition, a risk-on market mood boosted the ‘Aussie’, amid a cooling of global trade tensions.
Market-moving Australian data is in short supply today. Therefore, market risk appetite could drive AUD exchange rates.
New Zealand dollar (NZD) firms as market mood improves
The New Zealand dollar (NZD) also gained ground yesterday, with NZD buoyed by an improvement in risk appetite.
With New Zealand data also thin on the ground today, the risk-sensitive ‘kiwi’ may trade in line with broader market sentiment.
Pound (GBP) wobbles following jobs data
The pound (GBP) faced mixed movement yesterday following the UK’s latest jobs report, which revealed cooling wage growth and higher unemployment.
However, GBP was kept afloat by comments from Bank of England (BoE) Chief Economist Huw Pill, who suggested that wage growth is still too high and might mean interest rates are cut remain elevated for longer.
Turning to today, BoE Deputy Governor Sarah Breeden is due to deliver a speech. If she echoes recent comments about the need for caution when it comes to rate cuts, Sterling could strengthen.
Euro (EUR) cushioned by upbeat German data
The euro (EUR) was mixed yesterday, initially falling against stronger peers amid a risk-on market mood.
The common currency was spared further losses in the European trading session, thanks to a stronger-than-expected recovery in German economic sentiment and a decline in the US dollar (USD).
The only Eurozone data out today is Germany’s finalised inflation reading for April. Confirmation of a cooldown could dent EUR, although the impact may be limited.
US dollar (USD) stumbles as inflation cools
The US dollar fell yesterday after the latest US consumer price index showed that inflation unexpectedly cooled from 2.4% to a four-year low of 2.3% in April.
While this softer inflation print put some pressure on USD, many analysts believe prices could still spike due to Donald Trump’s tariffs, and this helped to limit the currency’s losses.
Two Federal Reserve policymakers are due to speak later this evening. If they reiterate the central bank’s hawkish message of needing to wait for certainty on tariffs before acting on interest rates, USD could regain ground.
Canadian dollar (CAD) declines despite rising oil prices
The crude-linked Canadian dollar (CAD) weakened yesterday, despite rising oil prices, amid concerns over the impact of US tariffs on the Canadian economy.
Notable CAD data remains in short supply today, potentially leaving the ‘loonie’ vulnerable to the negative impact of trade tensions.
Data releases
16:00 EUR German Inflation Rate (Apr)
17:15 GBP BoE Breeden Speech
19:15 USD Fed Waller Speech
23:10 USD Fed Jefferson Speech