Australian dollar subdued on weaker-than-expected inflation print

Australian dollar (AUD) muted as inflation cools

The Australian dollar (AUD) traded sideways through yesterday’s session, following the latest Australian CPI indicator.

Domestic inflation was shown to have cooled more than forecast in May, stoking bets for further interest rate cuts from the Reserve Bank of Australia (RBA).

AUD data is in short supply today, likely leaving the ‘Aussie’ sensitive to market risk appetite. If the Israel-Iran ceasefire continues to hold, a cautious optimism may help carry the Australian dollar higher.

New Zealand dollar (NZD) underpinned by positive trade figures

The New Zealand dollar (NZD) attracted modest support on Wednesday, in response to a larger-than-expected domestic trade surplus last month.

In the absence of any notable NZD economic releases, movement in the ‘kiwi’ is likely to be driven by wider market trends.

Pound (GBP) sidelined by lull in data

The pound (GBP) traded without a strong direction bias on Wednesday, in the absence of any notable UK economic data.

GBP investors were instead left to mull over remarks made by Bank of England (BoE) policymakers earlier in the week, which offered a mixed outlook on monetary policy.

BoE Governor Andrew Bailey is scheduled to speak again later today. His remarks may underpin Sterling sentiment, if he continues to downplay the chances of an August rate cut.

Euro (EUR) subdued amid fresh EU-US trade jitters

The euro (EUR) was muted through yesterday’s session amid fresh concerns over transatlantic trade tensions.

These jitters followed the news that even at 10%, the EU sees US President Donald Trump’s tariffs as grounds to retaliate with its own measures.

EUR investors will look to a speech by European Central Bank (ECB) Vice-President Luis de Guindos for fresh impetus today. A hawkish tilt from de Guindos may further dampen bets for a July rate cut and help to buoy the euro.

US dollar (USD) flat as geopolitical risks fade

The US dollar (USD) traded sideways yesterday, with the currency nursing its wounds following Tuesday’s sharp losses.

Safe-haven flows continued to recede as the fragile ceasefire between Israel and Iran appears to be holding, despite accusations of violations from both sides.

Barring a revision to the finalised first-quarter GDP figures, the primary catalyst for movement for the US dollar today will be the release of the latest US durable goods orders data. An expected rebound in order growth could help the ‘greenback’ claw back some of its recent losses.

Canadian dollar (CAD) steadies amid modest oil price recovery

The Canadian dollar (CAD) found its feet again on Wednesday, with a rebound in oil prices helping the commodity-linked currency stabilise following its dramatic losses in the first half of the week.

Movement in the ‘loonie’ is likely to remain tied to oil price dynamics today. A continued recovery could help revive CAD demand.

Data releases

19:45 EUR ECB De Guindos Speech

21:00 GBP BoE Governor Bailey Speech

22:30 USD Durable Goods Orders (May)

22:30 USD GDP (Q1)

 


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