Australian dollar (AUD) boosted by strong PMIs
The Australian dollar (AUD) climbed yesterday as surprisingly strong PMI results for July lifted the ‘Aussie’.
Private sector activity hit its highest level since April 2022, according to the preliminary PMI results, painting a promising picture of the Australian economy this month.
The ‘Aussie’ ends the week with little new economic data to go by. Therefore, market risk dynamics may drive AUD movement today.
New Zealand dollar (NZD) firms amid risk-on mood
The New Zealand dollar (NZD) also ticked higher yesterday, with the risk-sensitive ‘kiwi’ enjoying an upbeat market mood.
New Zealand data remains thin on the ground today, with NZD potentially continuing to be driven by market risk appetite.
Pound (GBP) slips as PMIs disappoint
The pound (GBP) fell yesterday after the UK’s latest PMI results showed an unexpected slowdown in service sector activity.
GBP investors also picked up on the fact that job losses in the services sector accelerated this month, which boosted bets on more Bank of England (BoE) rate cuts.
The focus for GBP investors today will be the UK’s latest retail sales figures. An expected rebound in British sales growth could boost the pound.
Euro (EUR) recovers following ECB rate decision
The euro (EUR) initially weakened yesterday, with a risk-on mood offsetting better-than-expected PMI results.
However, EUR rebounded after the European Central Bank (ECB) left interest rates unchanged and ECB President Christine Lagarde struck a fairly hawkish tone in her subsequent press conference.
Germany’s latest business climate index could support EUR today, with economists expecting the index to hit its highest level since April 2024.
US dollar (USD) muted amid risk-positive trade
The US dollar (USD) was subdued yesterday, as a broadly risk-on market mood sapped the safe-haven currency’s appeal.
The ‘greenback’ attempted to recover during the European trading hours as risk sentiment weakened and the latest S&P services PMI smashed forecasts, but the currency found itself muted.
Turning to today, the latest US durable goods orders data could weigh on the ‘greenback’. Forecasters expect to see a 10.8% decline in order growth last month.
Canadian dollar (CAD) mixed despite rising oil and strong sales figures
The crude-linked Canadian dollar (CAD) was mixed yesterday, rising against weaker rivals but struggling elsewhere despite an uptick in oil prices and a strong rise in Canadian retail sales in June.
Looking ahead, oil price dynamics and US-Canada trade tensions could drive CAD movement today.
Data releases
16:00 GBP Retail Sales (Jun)
18:00 EUR ECB Survey of Professional Forecasters
18:00 EUR German Ifo Business Climate (Jul)
22:30 USD Durable Goods Orders (Jun)