Australian dollar (AUD) pressured by geopolitical developments
The Australian dollar (AUD) stumbled through the start of this week’s session after US strikes at Iranian nuclear sites over the weekend threatened to escalate tensions in the Middle East.
This pullback in the ‘Aussie’ came despite stronger-than-expected domestic PMIs.
Expect the Australian dollar to face an uphill battle today, assuming the focus remains on Iran and its potential response to recent attacks.
New Zealand dollar (NZD) slides in risk-off trade
The New Zealand dollar (NZD) also tumbled on Monday as investors shunned risk-sensitive assets.
NZD investors will be bracing for further losses today if tensions in the Middle East continue to bubble.
Pound (GBP) appreciates as UK unveils new industrial strategy
The pound (GBP) trended broadly higher yesterday amid a cautiously optimistic response to the UK’s new industrial strategy.
It’s hoped that a range of new policy measures, including lower energy prices and new skills training, will help to accelerate growth in several key sectors.
GBP investors will look to a speech by Bank of England (BoE) Governor Andrew Bailey for fresh impetus today. If he continues to downplay a potential August interest rate cut, it may help extend Sterling’s upside potential.
Euro (EUR) pressured by disappointing Eurozone PMIs
The euro (EUR) struggled on Monday as the Eurozone’s latest PMIs fell short of expectations.
Growth in the bloc’s private sector as a whole remained anaemic this month, only barely avoiding contraction.
Germany will publish its latest IFO business climate index today, with the euro likely to catch bids if morale continues to improve this month.
US dollar (USD) fluctuates amid Middle East uncertainty
The US dollar (USD) opened this week on firm footing as the tensions in the Middle East triggered a flight to safety.
However, the bulk of these gains were unwound by the end of Monday’s session amid hopes a diplomatic solution to the crisis could still be found.
While events in the Middle East will continue to impact the US dollar, USD sentiment may also be influenced by comments from Federal Reserve Chair Jerome Powell as he is grilled by Congress later today.
Canadian dollar (CAD) wavers amid oil price volatility
Trade in the Canadian dollar (CAD) was also choppy on Monday amid some sharp swings in oil prices.
Coming up, Canada will publish its latest consumer price index later today. If inflation remained weak last month, it’s likely to stoke Bank of Canada (BoC) rate cut bets and drag on the ‘loonie’.
Data releases
18:00 EUR German IFO Business Climate (Jun)
18:00 GBP BoE Governor Bailey Speech
22:30 CAD Inflation Rate (May)
00:00 USD Fed Chair Powell Testimony