Australian dollar (AUD) recovers amid hopes for tariff deadline extension
The Australian dollar (AUD) initially trended lower yesterday after the Reserve Bank of Australia’s (RBA) latest meeting minutes showed an appetite among policymakers for further interest rate cuts.
However, the ‘Aussie’ rallied in the evening as US Treasury Secretary Scott Bessent said there would ‘likely’ be an extension to the US-China tariff deadline of 12 August.
Turning to today, market risk dynamics may drive AUD movement. If a hopeful mood prevails, the Australian dollar could climb.
New Zealand dollar (NZD) rebounds from weak trade data
The New Zealand dollar (NZD) was also volatile yesterday. Weak trade data and rising bets on another Reserve Bank of New Zealand (RBNZ) rate cut saw NZD initially slump, before US-China trade optimism helped it bounce back.
Looking forward, a lack of New Zealand data could leave NZD to trade on market risk appetite through today’s session.
Pound (GBP) fluctuates following borrowing figures
The pound (GBP) wavered yesterday, with higher-than-forecast public borrowing fuelling concerns about the possible need for further tax rises in the autumn.
Although the Office for Budget Responsibility (OBR) said that borrowing was in line with its March forecasts and the outlook for the second half of the year is brighter, Sterling found itself subdued.
Movement in the pound may be muted today, as GBP investors await some impactful UK data due in the second half of the week.
Euro (EUR) uncertain as trade talks continue
The euro (EUR) traded without a clear direction yesterday amid a lack of Eurozone data and ongoing uncertainty over EU-US trade talks.
Negotiations between Brussels and Washington are ongoing, with no signs of a breakthrough. While the EU has signalled a willingness to agree an unbalanced deal that favours the US, it is also reportedly considering whether to deploy ‘anti-coercion’ measures in a no-deal scenario.
EUR investors may be reluctant to adjust their positions in the euro today, with the European Central Bank (ECB) policy decision due tomorrow.
US dollar (USD) remains muted amid policy concerns
The US dollar (USD) ticked slightly lower yesterday as US policy concerns kept investors wary of the ‘greenback’.
With US President Donald Trump’s tariff deadline looming, and amid his ongoing attempts to pressure Federal Reserve Chair Jerome Powell into cutting interest rates, USD struggled to attract support.
Market-moving US data is in short supply today. Therefore, market risk appetite could influence the safe-haven US dollar.
Canadian dollar (CAD) edges up despite softer oil prices
The crude-linked Canadian dollar (CAD) was unfazed by weakening oil prices yesterday, with the ‘loonie’ able to inch higher against many of its peers.
Canadian data is also thin on the ground today, leaving CAD likely to be driven by oil price dynamics.