Australian dollar (AUD) steady ahead of RBA decision
The Australian dollar (AUD) traded in a narrow range at the start of this week, with AUD investors reluctant to alter their positions in the currency ahead of the Reserve Bank of Australia’s (RBA) latest interest rate decision.
The RBA is widely expected to deliver a rate cut when it concludes its latest policy meeting later this afternoon, with investors confident there won’t be a repeat of last month’s hawkish surprise.
While the rate cut is largely priced in, if there are any reservations regarding future cuts, the ‘Aussie’ could climb.
New Zealand dollar (NZD) slips in risk-off trade
The New Zealand dollar (NZD) was left to drift lower on Monday as a risk-averse mood limited demand for the currency.
The ‘kiwi’ is likely to remain tied to market risk dynamics today as impactful NZD data remains in short supply.
Pound (GBP) muted ahead of key data
The pound (GBP) treaded water through yesterday’s session as GBP investors braced for the UK’s upcoming employment and GDP figures.
These reports carry added weight as they could strengthen or weaken the case made by hawkish members within the Bank of England (BoE) in a narrower-than-expected decision to cut rates last week.
First up will be June’s jobs data, where another drop in payrolls could increase pressure on the BoE to continue to cut rates and drag on Sterling.
Euro (EUR) steady amid Ukraine hopes
The euro (EUR) was stable on Monday, with EUR sentiment buoyed by the cautious optimism regarding upcoming Ukraine peace talks between US President Donald Trump and his Russian counterpart, Vladimir Putin.
While there is a great deal of scepticism surrounding the talks, markets hope it will at least be a small step towards bringing peace to Europe for the first time in over three years.
Turning to today’s session, the euro is likely to come under pressure if Germany’s latest ZEW economic sentiment index reports morale in the Eurozone’s largest economy deteriorated this month.
US dollar (USD) buoyed by cautious mood
The US dollar (USD) opened this week’s session on positive footing, with the safe-haven currency catching bids from jittery investors.
However, the dollar’s upside potential remained limited, with USD investors reluctant to bid too aggressively ahead of the latest US consumer price index.
July’s CPI figures will be centre stage today, with the US dollar potentially strengthening if a rise in headline and core inflation prompts a trimming of Federal Reserve rate cut expectations.
Canadian dollar (CAD) wavers as oil prices fluctuate
Trade in the Canadian dollar (CAD) was a little choppy on Monday, as fluctuating oil prices infused volatility into the commodity-linked currency.
In the absence of any notable domestic data, it’s likely the ‘loonie’ will continue to move in tandem with oil prices today.
Data releases
11:30 AUD Business Confidence (Jul)
14:30 AUD RBA Interest Rate Decision
16:00 GBP Unemployment Rate (Jun)
16:00 GBP Wage Growth (Jun)
19:00 EUR German ZEW Economic Sentiment Index (Aug)
22:30 USD Inflation Rate (Jul)