Australian dollar (AUD) slides despite positive jobs data
The Australian dollar (AUD) initially enjoyed support yesterday thanks to better-than-expected Australian employment data.
However, AUD soon surrendered its gains and fell sharply lower as a recovery in the US dollar (USD) dragged on the ‘Aussie’.
Looking ahead, Australian consumer inflation expectations could affect AUD today. With expectations forecast to ease, increased bets on more Reserve Bank of Australia (RBA) interest rate cuts could dent the Australian dollar.
New Zealand dollar (NZD) drops amid cautious trade
The New Zealand dollar (NZD) also slumped yesterday, as a cautious mood and rallying USD dampened NZD’s appeal.
The ‘kiwi’ could face further losses today if a risk-off market mood prevails.
Pound (GBP) buoyed by better-than-expected GDP
The pound (GBP) enjoyed support yesterday after the UK’s GDP figures for the second quarter beat forecasts.
The British economy expanded 0.3% in Q2, above forecasts for 0.1% growth. However, as this was still a slowdown from 0.7% in the first quarter, Sterling’s gains were limited.
Today, UK economic data is thin on the ground, potentially leaving the pound to trade without a clear direction.
Euro (EUR) slips ahead of Trump-Putin summit
The euro (EUR) weakened against some of its peers yesterday as EUR investors seemed nervous about talks on Ukraine between US President Donald Trump and Russian President Vladimir Putin.
In addition, the single currency’s strong negative correlation with a rising US dollar put some pressure on EUR.
The euro may be subdued today as Trump and Putin meet in Alaska to discuss peace proposals. Any headlines emerging from the summit could infuse EUR with volatility.
US dollar (USD) firms as hot PPI tempers Fed bets
The US dollar gained ground yesterday as producer price inflation outpaced expectations in July, helping to temper recent bets on an aggressive easing cycle from the Federal Reserve.
US producer prices surged 0.9% in July, above the expected 0.2%, which could feed through into consumer price inflation. In addition, jobless claims were lower than expected, further helping to underpin USD.
Turning to today, US retail sales are the focus for USD investors. Another healthy increase in sales in July could bolster the ‘greenback’.
Canadian dollar (CAD) supported by rising oil prices
The crude-linked Canadian dollar (CAD) firmed against its weaker peers yesterday, thanks to an uptick in oil prices and strength in USD.
Oil price dynamics may drive CAD movement again today. Can oil sustain its upside and thereby lift the ‘loonie’?
Data releases
08:30 NZD Business NZ PMI (Jul)
11:00 AUD Consumer Inflation Expectations (Aug)
22:30 USD Retail Sales (Jul)
23:15 USD Industrial Production (Jul)
00:00 USD Michigan Consumer Sentiment (Aug)