Australian dollar (AUD) inches higher as markets remain upbeat
The Australian dollar (AUD) trended broadly higher yesterday, as markets remained cautiously optimistic about the ceasefire between Israel and Iran.
However, the recent risk-on rally began to lose steam, stifling the currency’s progress as the session unfolded.
With Australian data absent from the calendar today, the market mood could drive AUD movement. Will continued cautious optimism help the ‘Aussie’ end the week on positive footing?
New Zealand dollar (NZD) muted despite risk-on mood
The New Zealand dollar (NZD) was less fortunate than its Australian counterpart yesterday, as the tail end of the uplift in market risk appetite failed to provide NZD with notable support.
New Zealand’s consumer confidence results, published earlier this morning, could affect NZD moving forward. Otherwise, risk appetite may be the defining factor for the ‘kiwi’.
Pound (GBP) uncertain amid BoE Bailey remarks
The pound (GBP) moved without a clear trajectory yesterday following mixed comments from Bank of England (BoE) Governor Andrew Bailey.
While Bailey said that there was growing slack in the labour market, he also said the National Insurance hike could be feeding through to consumer prices.
UK economic data remains in short supply today, potentially leaving Sterling to end the week without a clear directional bias.
Euro (EUR) marches higher amid USD decline
The euro (EUR) strengthened yesterday, shrugging off some downbeat German data, thanks to the common currency’s negative correlation with a sliding US dollar (USD).
EUR investors largely ignored an unexpected decline in consumer confidence in the Eurozone’s largest economy, as USD weakness boosted demand for the euro.
The Eurozone’s latest economic sentiment index is due out today. Could an expected modest improvement be enough to lift the single currency?
US dollar (USD) drops to new lows amid Fed concerns
The US dollar fell to a fresh three-year low yesterday. Reports that Donald Trump may pick Federal Reserve Chair Jerome Powell’s successor early raised concerns about the central bank’s independence.
The finalised US GDP figures for the first quarter added to USD’s losses, as they were revised lower to report a larger 0.5% contraction.
Looking forward, the US core PCE price index for May is the focus for USD investors. If the Fed’s preferred measure of inflation accelerated last month, a pullback in rate cut bets could support the US dollar.
Canadian dollar (CAD) buoyed by rising oil prices
The crude-linked Canadian dollar (CAD) rose yesterday amid a recovery in oil prices.
Canada’s GDP figures are front and centre for CAD investors today. With the Canadian economy expected to have contracted in May, the ‘loonie’ may struggle to attract support.
Data releases
08:00 NZD ANZ Roy Morgan Consumer Confidence (Jun)
19:00 EUR Economic Sentiment (Jun)
22:30 CAD GDP (May)
22:30 USD Core PCE Price Index (May)