Australian dollar (AUD) wavers amid mixed sentiment
The Australian dollar (AUD) initially firmed yesterday, with a risk-on market mood helping to spur the currency higher.
However, these gains faded through the European trading session as market sentiment began to sour.
Australia will publish its latest jobs figures later this morning. While unemployment is expected to remain unchanged, the ‘Aussie’ may falter if employment growth underwhelms.
New Zealand dollar (NZD) moves in tandem with risk sentiment
The New Zealand dollar (NZD) also fluctuated on Wednesday as the ‘kiwi’ tracked the shifts in market risk appetite.
Movement in NZD will likely remain tied to market risk dynamics today, potentially leading to further weakness if sentiment remains subdued.
Pound (GBP) buoyed by UK-EU trade deal hopes
The pound (GBP) traded positively against most of its peers on Wednesday, amid optimism over an upcoming UK-EU summit.
While the priority of the summit will be a new defence and security pact, discussions regarding a new UK-EU trading relationship are also expected.
In the meantime, the UK’s latest GDP figures may provide a boost for Sterling today as they are expected to report a sharp uptick in growth in the first quarter.
Euro (EUR) underpinned by USD weakness
The euro (EUR) trended broadly higher yesterday as the single currency drew strength from its negative correlation with the US dollar (USD).
However, renewed concerns over transatlantic trade relations ultimately limited the euro’s upside potential on Wednesday.
EUR investors will look to a speech by European Central Bank (ECB) Vice-President Luis de Guindos for fresh impetus today. A dovish tilt to his remarks could weaken the euro.
US dollar (USD) extends post-inflation losses
The US dollar remained on the defensive yesterday, as the currency continued to be pressured by Tuesday’s surprisingly weak US inflation figures.
The downside in USD was compounded by comments from US President Donald Trump, criticising the Federal Reserve and repeating his call for lower interest rates.
The release of the latest US retail sales figures may exert additional pressure on the US dollar today. April’s figures are expected to show that tariff uncertainty has caused consumers to slash their spending.
Canadian dollar (CAD) stumbles as oil prices slip
The Canadian dollar (CAD) retreated on Wednesday as softer oil prices limited the appeal of the commodity-linked currency.
CAD exchange rates will likely remain sensitive to oil price movements through today’s session, potentially leading to further weakness in the ‘loonie’ if crude continues to slide.
Data releases
11:30 AUD Unemployment Rate (Apr)
16:00 GBP GDP (Q1)
20:15 EUR ECB Guindos Speech
22:30 USD Retail Sales (Apr)