Australian dollar (AUD) surges following RBA decision
The Australian dollar (AUD) leapt higher yesterday after the Reserve Bank of Australia (RBA) left interest rates on hold, rather than cutting as expected.
In addition, a risk-on market mood boosted the ‘Aussie’, with investors cheered by Donald Trump’s tariff deadline delay.
Turning to today, a speech from RBA Deputy Governor Andrew Hauser could impact AUD. After the bank’s surprise rate hold, investors may be keen for any hints over the future of monetary policy.
New Zealand dollar (NZD) rises as risk appetite improves
The New Zealand dollar (NZD) also gained ground yesterday, as the improving market mood boosted the risk-sensitive currency.
Looking ahead, the Reserve Bank of New Zealand’s (RBNZ) upcoming policy decision is the focus for NZD investors today. While an expected rate hold could lend the ‘kiwi’ support, investors may be focused on any accompanying commentary.
Pound (GBP) slumps amid debt anxiety
The pound (GBP) faced notable headwinds yesterday as the Office for Budget Responsibility’s (OBR) latest report on fiscal risks fuelled concerns about the UK deficit.
The country’s fiscal watchdog warned that British public finances are ‘vulnerable’ and that risks are rising, with public debt on track to hit 270% of GDP by the 2070s under the current policy settings.
These fears could continue to weigh on Sterling today, amid a lack of fresh UK economic data.
Euro (EUR) stumbles amid trade concerns
The euro (EUR) weakened against most of its rivals yesterday as German exports and imports both fell far more than expected in May.
This was followed by a statement from German finance minister Lars Klingbeil, who warned that the EU is ‘ready to take countermeasures’ against the US if a fair trade deal cannot be agreed.
Later today, two senior figures from the European Central Bank (ECB) are due to deliver speeches. If Chief Economist Philip Lane and Vice-President Luis de Guindos both strike a relatively hawkish tone, EUR could attract support.
US dollar (USD) regains ground as Treasury yields rise
The safe-haven US dollar (USD) initially weakened yesterday as a risk-on mood prevailed following Donald Trump’s extension to his tariff deadline.
However, the ‘Greenback’ was able to recoup these losses, with an ongoing rise in US Treasury yields lifting USD exchange rates.
US economic data remains thin on the ground today, with tariff headlines and market risk appetite likely to drive USD exchange rates.
Canadian dollar (CAD) boosted by upbeat PMI
The Canadian dollar (CAD) rose against many of its peers yesterday as the latest Ivey PMI pointed to an unexpectedly strong improvement in business activity last month.
Oil price dynamics could be the primary factor influencing the crude-linked ‘loonie’ today amid a lack of Canadian economic data.
Data releases
09:00 AUD RBA Hauser Speech
12:00 NZD RBNZ Interest Rate Decision
20:45 EUR ECB Lane Speech
21:00 EUR ECB Guindos Speech