Australian dollar (AUD) boosted by Chinese stimulus hopes
The Australian dollar (AUD) trended broadly higher at the end of last week’s session, amid fresh hopes for a new stimulus package from Beijing.
This followed some lacklustre Chinese economic releases, which stoked expectations that the Chinese economy is slowing.
In the absence of any notable domestic data, any movement in the ‘Aussie’ today is likely to be linked to market risk dynamics, with a cautious mood potentially sapping AUD demand.
New Zealand dollar (NZD) weakens in risk-averse trade
The New Zealand dollar (NZD) struggled to attract support on Friday as a jittery market mood dragged on the risk-sensitive currency.
New Zealand’s latest PMI data may act as a headwind for the ‘kiwi’ at the start of this week, if July’s data reports another contraction in private sector activity.
Pound (GBP) undermined by profit-taking.
A bout of profit-taking dragged on the pound (GBP) on Friday, with GBP investors looking to book some of their gains in end-of-week trade.
This followed a steady rise in Sterling earlier in the week as UK data surprised to the upside and underpinned hawkish Bank of England (BoE) rate bets.
Turning to this week, a lull in UK data through the first half of the session is likely to see movement in the pound reflect broader market trends.
Euro (EUR) buoyed by Trump-Putin talk hopes
The euro (EUR) edged higher through Friday’s European session, amid a sense of cautious optimism ahead of US President Donald Trump’s meeting with Russian President Vladimir Putin.
Trump’s comments warning of ‘economically severe’ sanctions on Russia if Putin is not willing to end the war bolstered hopes that the talks could actually be a meaningful step towards peace in Europe.
Meanwhile, the euro may struggle to find direction at the start of this week, as notable EUR data remains thin on the ground.
US dollar (USD) weakens as consumer sentiment deteriorates
The US dollar (USD) closed last week’s session on a sour note, as the University of Michigan’s latest consumer sentiment index reported morale fell to a three-month low in August.
This extended losses from earlier in the session, which stemmed from the optimism ahead of the Trump-Putin summit.
Turning to this week, movement in the US dollar may be limited in the first half of the session as USD investors await Federal Reserve Chair Jerome Powell’s speech at the bank’s annual Jackson Hole Symposium.
Canadian dollar (CAD) subdued as oil prices soften
The Canadian dollar (CAD) weakened through Friday’s session, undermined by the continued slide in oil prices.
In the absence of any notable Canadian data, it’s likely movement in the ‘loonie’ will remain tied to oil price dynamics today.
Data releases
08:30 NZD Composite PMI (Jul)