Australian dollar (AUD) undermined by disappointing data
The Australian dollar (AUD) retreated on Wednesday, with the currency initially falling in response to a softer-than-expected Ai Group industry index.
Underwhelming domestic retail sales figures and risk-off flows then accelerated these losses through the remainder of the session.
Australia’s latest trade figures will be the primary focus for AUD investors today. If May’s figures report another contraction in exports, the ‘Aussie’ will likely remain under pressure.
New Zealand dollar (NZD) slides in risk-off trade
The New Zealand dollar (NZD) also fell back yesterday as a cautious mood made the risk-sensitive ‘kiwi’ less attractive to investors.
In the absence of any notable domestic data, NZD exchange rates are likely to remain tied to market risk dynamics throughout today’s session.
Pound (GBP) pressured by dovish BoE remarks
The pound (GBP) tumbled through Thursday’s session, after the Bank of England’s (BoE) Alan Taylor suggested the UK’s ‘deteriorating’ economic outlook warrants more aggressive monetary easing from the bank.
These losses then accelerated amid some uncertainty over the future of UK Chancellor Rachel Reeves, following Prime Minister Keir Starmer’s reluctance to offer her his support during Prime Minister’s Questions.
Sterling may remain under pressure through today’s session amid concerns that the Labour government is growing increasingly unstable.
Euro (EUR) gains tempered by rise in unemployment
The euro (EUR) trended broadly higher on Thursday, as the cautious market mood bolstered the single currency’s safe-haven appeal.
Capping these gains, however, was the Eurozone’s latest unemployment report, which reported a surprise uptick in the bloc’s jobless rate in May.
The minutes from the European Central Bank’s (ECB) latest meeting are likely to determine the direction of the euro today. If policymakers indicate that interest rates are nearing their neutral level, it may help bolster EUR exchange rates.
US dollar (USD) rebounds despite abysmal employment data
The US dollar (USD) bounced off multi-year lows yesterday, as the currency’s recent losses made it more attractive to price-conscious investors.
However, the dollar’s upside potential remained limited in the wake of the latest ADP employment figures, following a shock decline last month.
If today’s more influential non-farm payroll report also disappoints, the US dollar could test new lows later this evening.
Canadian dollar (CAD) bolstered by oil price rally
The Canadian dollar (CAD) strengthened on Thursday, with the commodity-linked currency rising in tandem with global oil prices.
Coming up, the ‘loonie’ could face headwinds today, if Canada’s latest trade figures report that friction between the US and Canada continued to impact exports in May.
Data releases
13:30 AUD Balance of Trade (May)
18:00 EUR Services PMI (Jun)
18:30 GBP Services PMI (Jun)
21:30 EUR ECB Meeting Minutes
22:30 CAD Balance of Trade (May)
22:30 USD Non-Farm Payrolls (Jun)
00:00 USD ISM Services PMI (Jun)