Australian dollar (AUD) fluctuates in mixed trade
The Australian dollar (AUD) stumbled through yesterday’s Asian trading session as waning risk appetite took its toll on the currency.
However, AUD exchange rates began to recover in overnight trade, aided by rising commodity prices and a weaker US dollar (USD).
In the absence of any domestic data of note, movement in the ‘Aussie’ is likely to remain tied to market risk dynamics today, potentially leading to further weakness if a cautious mood continues to prevail.
New Zealand dollar (NZD) struggles despite upbeat GDP print
The New Zealand dollar (NZD) was subdued on Thursday, with NZD investors shrugging off stronger-than-expected domestic GDP figures, which had limited impact on Reserve Bank of New Zealand (RBNZ) policy expectations.
NZD investors will turn their focus to New Zealand’s trade figures today. If exports rose again in November, it could offer some modest support to the ‘kiwi’.
Pound (GBP) firms on hawkish BoE signals
The pound (GBP) strengthened yesterday in the wake of the Bank of England’s (BoE) final interest rate decision of the year.
While the BoE cut rates as expected and lowered its inflation forecast, its policy statement also suggested that future judgements to ease policy will become ‘a closer call’, indicating the pace of future cuts may be slower.
Meanwhile, the release of the UK’s latest retail sales figures may help underpin Sterling today if they show sales growth rebounded as forecast last month.
Euro (EUR) stumbles as ECB wary of EUR strength
The euro (EUR) ticked lower on Thursday as the European Central Bank (ECB) also delivered its last rate decision of 2025.
While the ECB left rates on hold and revised its growth forecasts higher, ECB President Christine Lagarde’s comments warning that a ‘stronger euro could bring down inflation’ acted as a headwind for the single currency.
Germany’s latest consumer confidence index may provide some lift for the euro today if it reports an improvement of morale going into January.
US dollar (USD) slides on soft CPI print
The US dollar retreated during yesterday’s session after the latest US consumer price index reported US inflation fell from 3% to 2.7% in November.
The shock drop in inflation reinforced the recent USD selling bias as it stoked bets for more monetary easing from the Federal Reserve in 2026.
Closing out this week’s session will be the publication of the University of Michigan’s latest consumer sentiment index. If December’s finalised figures confirm an improvement in morale, it may help to underpin the US dollar.
Canadian dollar (CAD) flat as oil prices stall
The Canadian dollar (CAD) was trapped in a narrow range on Thursday, as oil prices stalled.
Coming up, the ‘loonie’ may strengthen later today if Canada’s latest retail sales data reports that sales growth rebounded in November.
Data releases
07:45 NZD Trade Balance (Nov)
17:00 EUR German Consumer Confidence (Jan)
17:00 GBP Retail Sales (Nov)
23:30 CAD Retail Sales (Oct)
01:00 USD Consumer Sentiment (Dec)