Australian dollar (AUD) wavers following mixed Chinese data
Mixed Chinese data saw the Australian dollar (AUD) trade without a clear direction yesterday, as GDP beat forecasts but retail sales missed the mark.
AUD then came under pressure overnight as an uptick in US inflation in June boosted the US dollar (USD) and dented market risk appetite.
With Australian economic data absent from the calendar today, any shifts in the market mood could drive AUD movement.
New Zealand dollar (NZD) undermined by US inflation
The New Zealand dollar (NZD) attempted to push higher yesterday amid an improving market mood, before the US inflation figures dragged NZD back down.
Looking forward, risk sentiment may be the primary factor for NZD today. Any shifts could infuse the ‘kiwi’ with volatility.
Pound (GBP) muted amid lack of data
The pound (GBP) was subdued yesterday as a lack of UK economic data left Sterling struggling to find support.
This left GBP investors to dwell on dovish comments from Bank of England (BoE) Governor Andrew Bailey earlier in the week, with the pound softening against stronger peers.
Turning to today, the spotlight falls on the UK’s latest consumer price index. If inflation holds at 3.4%, as expected, it could underpin Sterling. However, GBP investors may be hesitant ahead of tomorrow’s crucial jobs data.
Euro (EUR) dented by stronger US dollar
After a trading sideways for much of the session, the euro (EUR) then came under significant pressure overnight.
EUR’s strong negative correlation with the US dollar saw it slide as USD strengthened.
Ongoing EU-US trade negotiations could impact the euro today. Any signs of progress could lift EUR, while ongoing concerns about tariffs could weigh on the common currency.
US dollar (USD) climbs as inflation rises
The US dollar leapt higher yesterday following the latest American consumer price index.
With inflation rising from 2.4% to 2.7% in June – its highest level since February – markets pared back bets on Federal Reserve interest rate cuts, thereby booting USD.
The latest US producer price inflation figures could influence USD today. Any signs of stubborn price pressures for American producers could further support the ‘greenback’.
Canadian dollar (CAD) buoyed by USD correlation
The Canadian dollar (CAD) found success yesterday thanks to its positive correlation with USD and higher-than-forecast Canadian core inflation in June.
Canadian economic data is thin on the ground today, therefore oil price movements may drive the commodity-linked ‘loonie’.
Data releases
16:00 GBP Inflation Rate (Jun)
19:00 EUR Balance of Trade (May)
22:30 USD PPI (Jun)
23:15 USD Industrial Production (Jun)