Australian dollar (AUD) pulls back amid souring mood
The Australian dollar (AUD) initially strengthened yesterday after signs of stubborn underlying inflation reinforced bets on a Reserve Bank of Australia (RBA) interest rate hike.
However, the risk-sensitive ‘Aussie’ retreated in the evening as a souring market mood dampened AUD demand.
Turning to today, Australia’s latest balance of trade data could impact AUD. If the country’s trade surplus expanded as expected in November, the ‘Aussie’ could enjoy support.
New Zealand dollar (NZD) wavers alongside AUD
The New Zealand dollar (NZD) traded broadly in tandem with AUD yesterday, initially trending higher but trimming its gains as sentiment soured overnight.
New Zealand data continues to be thin on the ground today, likely leaving global risk dynamics to determine NZD’s direction.
Pound (GBP) softens in absence of data
The pound (GBP) trended broadly lower yesterday as a lack of impactful UK data left the currency exposed to losses.
However, the downside in GBP was limited due to the quiet economic calendar.
With no UK data due out during today’s session, Sterling may struggle to find a clear trajectory.
Euro (EUR) mixed following CPI release
The euro (EUR) traded without a clear direction yesterday as markets reacted to a mixed Eurozone consumer price index.
While the core inflation measure was slightly softer than anticipated, the data did not see Tuesday’s steep drop in German inflation reflected in the wider Eurozone.
A forecast decline in Germany factory orders could dent EUR today, although a strong Eurozone economic sentiment index may help to offset any downside.
US dollar (USD) wobbles amid uneven data
The US dollar (USD) also saw some choppy movement yesterday as a shifting market mood saw the safe-haven currency stumble before finding its footing in the evening.
Mixed US data also contributed to the uncertainty, with a stronger services PMI being offset by weaker jobs data and falling factory orders.
USD could face pressure today, if initial jobless claims in the US rose as expected last week. Elsewhere, market sentiment may influence the ‘greenback’.
Canadian dollar (CAD) rebounds after oil-induced dip
The crude-linked Canadian dollar (CAD) briefly touched multi-week lows against some rivals yesterday, following a drop in oil prices, before a strong Ivey PMI survey for December helped to shore up CAD demand.
Canadian data is hard to come by today. Therefore oil price movements could drive CAD exchange rates.
Data releases
10:30 AUD Balance of Trade (Nov)
17:00 EUR German Factory Orders (Nov)
20:00 EUR Economic Sentiment (Dec)
23:30 USD Initial Jobless Claims (03/Jan