Australian dollar (AUD) slumps amid weak jobs data
The Australian dollar (AUD) plunged on Thursday, as an unexpected decline in domestic employment in May weighed on the currency.
A souring market mood also dampened the risk-sensitive Australian dollar’s appeal, with the Federal Reserve’s hawkish interest rate decision and escalating geopolitical tensions fuelling risk aversion.
With little Australian data to go by today, AUD investors may be influenced primarily by global risk dynamics. Could a souring mood see the ‘Aussie’ dollar end the week on the back foot?
New Zealand dollar (NZD) crumbles amid risk aversion
The New Zealand dollar (NZD) also plummeted yesterday as a sharp deterioration in risk appetite sent the ‘kiwi’ into a tailspin.
New Zealand data is absent from the calendar today, leaving the ‘kiwi’ exposed to any shifts in market risk appetite.
Pound (GBP) supported by BoE rate decision
The pound (GBP) gained ground yesterday as markets responded to the Bank of England’s (BoE) interest rate decision.
The BoE held rates steady, as expected, with Governor Andrew Bailey pushing back slightly on market expectations of a rate cut in August.
GBP investors will now turn their attention to the latest UK retail sales figures. An expected contraction in sales growth could weigh on the pound.
Euro (EUR) unsure despite risk-off mood
The euro (EUR) was mixed yesterday, with EUR’s safe-haven status and negative correlation with the US dollar (USD) both impacting the common currency.
While an anxious mood helped the euro rise against riskier rivals, EUR exchange rates struggled elsewhere.
Looking forward, the single currency could come under pressure today amid an expected decline in German producer prices in May, which may boost European Central Bank (ECB) interest rate cut bets.
US dollar (USD) boosted by hawkish Fed decision
The US dollar strengthened yesterday after the Fed defied Donald Trump by leaving interest rates unchanged and indicated that the bank expects US tariffs to keep inflation elevated this year.
However, USD then trimmed its gains amid fears that the US could become directly involved in the Israel-Iran war by launching strikes on Iran.
The ‘greenback’ ends the week with little in the way of economic data. Therefore, risk sentiment and geopolitical tensions could impact USD.
Canadian dollar (CAD) unsupported by rising oil
The crude-linked Canadian dollar (CAD) failed to gain ground yesterday despite rising oil prices, with the currency sliding against all but its weakest peers.
Today, CAD investors could take their cues from the latest Canadian retail sales figures. With sales growth expected to have remained positive in May, the ‘loonie’ could enjoy support.
Data releases
16:00 EUR German PPI (May)
16:00 GBP Retail Sales (May)
22:30 CAD Retail Sales (May)
00:00 EUR Consumer Confidence (Jun)