Australian dollar (AUD) rises despite mixed market mood
The Australian dollar (AUD) trended higher yesterday, with investors buying the ‘Aussie’ despite an uncertain market mood.
Rising commodity prices seemed to lift the currency, thanks to its resource-sensitive nature.
Turning to today, Australia’s latest employment report is the focus. Could signs of a healthy job market lend AUD support?
New Zealand dollar (NZD) rangebound amid uncertainty
The New Zealand dollar (NZD) wavered mostly sideways yesterday, with the mixed market mood trapping the ‘kiwi’ within a narrow range.
Positive domestic GDP results could support the New Zealand dollar at the start of today’s session, though the ongoing Middle East crisis may infuse NZD with volatility as the session unfolds.
Pound (GBP) mixed as BoE decision imminent
The pound (GBP) traded without a clear direction yesterday, with GBP investors reluctant to place aggressive bets ahead of the Bank of England’s (BoE) impending interest rate decision.
The UK’s latest consumer price index failed to prompt any decisive movement, with core inflation cooling more than expected but headline inflation remaining well above the BoE’s 2% target.
Today, all eyes are on the BoE’s policy announcement. A rate hold may not support the pound if it’s paired with dovish forward guidance, while a shock rate cut could see GBP slump.
Euro (EUR) propped up by softening USD
The euro (EUR) was mixed yesterday, although the single currency’s negative correlation with a falling US dollar (USD) provided it with some support.
Despite USD weakness, EUR struggled to gain ground as the Eurozone’s finalised CPI figures confirmed that inflation slipped below the European Central Bank’s (ECB) target last month.
ECB President Christine Lagarde is due to deliver a speech today. If she reaffirms the bank’s recent hawkish shift, the single currency could enjoy support.
US dollar (USD) retreats amid Israel-Iran uncertainty
The US dollar weakened yesterday, trimming some of Tuesday’s gains, as the prospect of direct US involvement in the Israel-Iran war worried USD investors.
The ‘greenback’ was also subdued as markets braced for the Federal Reserve’s interest rate decision.
Looking forward, market risk appetite may drive USD today. If tensions in the Middle East keep investors anxious, the ‘greenback’ could climb.
Canadian dollar (CAD) dragged down by oil prices
The crude-linked Canadian dollar (CAD) trended broadly lower yesterday as weakening oil prices weighed on the commodity-linked ‘loonie’.
An expected improvement in Canada’s business barometer for June could support CAD today, although oil prices and USD movement may have more of an impact.
Data releases
08:45 NZD GDP Growth Rate (Q1)
11:30 AUD Unemployment Rate (May)
17:30 EUR ECB President Lagarde Speech
21:00 CAD CFIB Business Barometer (Jun)
21:00 GBP BoE Interest Rate Decision