Australian dollar (AUD) fluctuates amid shifting mood
The Australian dollar (AUD) initially rose yesterday as markets welcomed the news that a federal court had blocked Donald Trump’s ‘liberation day’ tariffs.
However, the ‘Aussie’ couldn’t sustain its risk-on rally into the evening, amid speculation that the Trump administration will find a way to overturn or circumvent the ruling.
Risk appetite could continue to drive the Australian dollar today amid a lack of market-moving domestic data. Any more shifts in sentiment could see AUD exchange rates waver.
New Zealand dollar (NZD) rocked by decline in business confidence
The New Zealand dollar (NZD) was volatile yesterday, with NZD impacted by tariff optimism and a surprisingly large slump in New Zealand business confidence in May.
This morning’s domestic consumer confidence results could impact NZD through the start of today’s session. Otherwise, risk appetite may drive most movement.
Pound (GBP) choppy amid wider market trends
The pound (GBP) traded without a clear direction yesterday amid an ongoing lack of UK economic data.
This left Sterling exposed to wider market volatility, causing some erratic movement in the pound.
Sterling ends the week with UK data still absent from the calendar. As a result, GBP exchange rates could remain rudderless.
Euro (EUR) whipsaws on USD correlation
The euro (EUR) was initially dragged lower by the currency’s strong negative correlation with the rising US dollar (USD) yesterday.
However, this same correlation saw the common currency rebound strongly in the evening as USD retreated.
Today, EUR investors will be paying attention to Germany’s latest inflation reading. If inflation in the Eurozone’s largest economy eased this month, bets on more policy loosening from the European Central Bank (ECB) could undermine EUR.
US dollar (USD) see-saws as data undermines tariff optimism
The US dollar initially strengthened yesterday as USD investors welcomed the federal court ruling on Trump’s tariffs.
However, the ‘greenback’ then came under pressure in the evening following some downbeat US data. Although American first-quarter GDP shrank less than expected, a surprise slump in corporate profits and rising jobless claims both weighed on USD.
The Federal Reserve’s preferred measure of inflation – the core PCE price index – is in the spotlight today. Could a slight cooling of inflation boost Fed rate cut bets and pull USD lower?
Canadian dollar (CAD) trades alongside US dollar
The Canadian dollar (CAD) traded in tandem with its US counterpart yesterday, rising at first before falling back in the evening.
Turning to today, Canada’s latest GDP growth rate is the focus for CAD investors. The Canadian economy is forecast to have slowed in the first quarter of 2025, which could weigh on the ‘loonie’.
Data releases
08:00 NZD ANZ Roy Morgan Consumer Confidence (May)
16:00 EUR German Retail Sales (Apr)
22:00 EUR German Inflation Rate (May)
22:30 CAD GDP Growth Rate (Q1)
22:30 USD Core PCE Price Index (Apr)