Australian dollar (AUD) buoyed by upbeat Chinese PMI
The Australian dollar (AUD) ticked higher at the start of this week’s session, buoyed by better-than-expected Chinese PMI data.
The NBS composite PMI outpaced consensus forecasts last month, with the encouraging signs from Australia’s largest trading partner reflecting positively on AUD.
Whether the ‘Aussie’ will be able to extend this upward momentum will depend on whether China’s Caixin manufacturing PMI also prints positively today.
New Zealand dollar (NZD) supported by optimistic mood
The New Zealand dollar (NZD) also strengthened on Monday, with the ‘kiwi’ supported by the risk-positive mood that prevailed at the start of the session.
If this upbeat mood persists through today’s session, the ‘kiwi’ may be able to consolidate these gains.
Pound (GBP) pressured by falling household income
The pound (GBP) stumbled at the start of this week, despite the UK’s latest GDP figures confirming that the country was the fastest-growing economy in the G7 during the first three months of the year.
Sterling sentiment faltered as the GDP figures were accompanied by data showing that real household disposable income per head suffered its first quarterly decline in almost two years.
Coming up, Bank of England (BoE) Governor Andrew Bailey is scheduled to speak at the European Central Bank’s (ECB) annual Sintra forum later today. GBP investors will watch his comments for any additional hints on monetary policy.
Euro (EUR) sidelined by slowing German inflation
The euro (EUR) struggled to attract support yesterday, as EUR investors digested Germany’s latest economic releases.
EUR sentiment was suppressed through the latter half of the session after Germany’s consumer price index reported a shock cooling of inflation last month.
If this is mirrored in the Eurozone’s CPI figures later today, it may revive bets for a potential ECB interest rate cut later this month and pull the euro lower.
US dollar (USD) undermined by debt concerns
The US dollar (USD) got off to a slow start this week as President Donald Trump’s Big Beautiful Bill was back in the headlines after narrowly clearing an initial Senate vote.
The renewed focus on the bill sapped USD sentiment as it revived US deficit concerns, particularly in the wake of revised forecasts which suggest it will add $3.3 trillion to the national debt over the next decade.
A couple of key US economic releases will keep USD investors on their toes today. Signs of a slowing US labour market, coupled with another contraction in growth in the US factory sector last month, are likely to stoke Federal Reserve rate cut speculation and drag on the US dollar.
Canadian dollar (CAD) flat as US-Canada trade talks resume
The Canadian dollar (CAD) stabilised on Monday, with the currency recouping some of Friday’s losses after the Canadian government withdrew its digital tax plans, allowing for the restart of US-Canadian trade talks.
Barring any further trade developments, oil price dynamics will likely act as the primary catalyst of movement for the ‘loonie’ through today’s session.
Data releases
09:00 AUD Manufacturing PMI (Jun)
19:00 EUR Eurozone Inflation (Jun)
23:30 EUR ECB Lagarde Speech
23:30 GBP BoE Bailey Speech
23:30 USD Fed Powell Speech
00:00 USD ISM Manufacturing PMI (Jun)
00:00 USD JOLTs Job Openings (May)