Australian dollar (AUD) finds fleeting gains on upbeat retail data
The Australian dollar (AUD) initially firmed yesterday, drawing support from a surprisingly strong increase in domestic retail sales in June.
However, the ‘Aussie’ quickly relinquished these gains amid a negative shift in risk appetite through the European trading session.
Today sees the release of Australia’s latest producer price index. Expect the Australian dollar to weaken if an expected cooling of factory input prices stokes bets for Reserve Bank of Australia (RBA) interest rate cuts.
New Zealand dollar (NZD) wavers in uneven trade
Trade in the New Zealand dollar (NZD) was mixed on Thursday, with the currency fluctuating in tandem with market risk sentiment.
New Zealand’s latest consumer confidence figures could help to underpin the ‘kiwi’ today if they report another improvement in morale last month.
Pound (GBP) ends July on a low
The pound (GBP) trended broadly lower on Thursday, capping off the currency’s worst monthly performance in almost two years.
The slide in Sterling came as it continues to suffer from concerns over the UK’s fiscal health, with recent policy setbacks and lacklustre data painting a cloudy picture for growth in the second half of the year.
Turning to today’s session, the pound may struggle to attract support if July’s finalised manufacturing PMI confirms the UK factory sector remained in a state of contraction.
Euro (EUR) buoyed by positive data
Surprisingly upbeat data helped the euro (EUR) trend broadly higher through yesterday’s session.
These gains were initially driven by data showing that Eurozone unemployment held at a record low in June, before being reinforced after German inflation surprised to the upside last month.
The focus for EUR investors today will be the Eurozone’s consumer price index, with the euro likely to come under pressure if July’s preliminary CPI figures report another cooling of inflation.
US dollar (USD) stable as US inflation prints above expectations
The US dollar (USD) was steady on Thursday, with the currency consolidating its recent gains amid end-of-month trade flows.
This was aided by the latest US core PCE price index, as the Federal Reserve’s preferred indicator for inflation surprised to the upside in June.
The spotlight today will be on the latest US non-farm payroll report. If July’s figures point to a cooling US labour market, it may revive bets for a September rate cut and reverse some of the US dollar’s recent gains.
Canadian dollar (CAD) underpinned by rise in GDP
The Canadian dollar (CAD) attracted some modest support yesterday as CAD investors were pleasantly surprised by an uptick in Canadian GDP in June.
Notable Canadian data is in short supply at the end of this week, likely leaving the ‘loonie’ to fall back into step with oil price dynamics. If the recent oil price recovery resumes, CAD exchange rates will likely firm.
Data Releases
08:00 NZD Consumer Confidence (Jul)
11:30 AUD PPI (Q2)
18:30 GBP Manufacturing PMI (Jul)
19:00 EUR Inflation Rate (Jul)
22:30 USD Non-Farm Payrolls (Jul)