Australian dollar (AUD) soars as commodity prices rise
The Australian dollar (AUD) rallied yesterday, striking multi-month highs against some peers, as surging commodity prices boosted the resource-linked currency.
AUD was also buoyed by a brighter mood in Asian markets, which have been somewhat insulated from the ongoing tensions in the Atlantic.
Turning to today, Australia’s latest jobs report is the key focus for AUD investors. Could an expected rise in unemployment last month see the ‘Aussie’ stumble?
New Zealand dollar (NZD) buoyed by upbeat tone
The New Zealand dollar (NZD) also trended higher yesterday amid rising commodities and an upbeat mood in Asian markets.
Risk sentiment could drive NZD today. Could a positive mood see the ‘kiwi’ gain further ground?
Pound (GBP) subdued despite forecast-beating inflation
The pound (GBP) weakened against some rivals yesterday, as hotter-than-forecast UK inflation failed to dampen Bank of England (BoE) interest rate cut bets.
While headline inflation rose from 3.2% to 3.4% in December, core inflation held steady at 3.2% and services inflation rose less than forecast. Markets still expect 50 basis points of cuts from the BoE over the next year.
The Confederation of British Industry’s (CBI) latest distributive trades survey could subdue Sterling today, if it shows a continued downturn in retail sales volumes in January.
Euro (EUR) struggles in absence of data
The euro (EUR) fell against its stronger peers yesterday and wavered elsewhere as a lack of notable data left EUR unsupported.
Comments from European Central Bank (ECB) President Christine Lagarde also failed to aid the common currency, as she said US tariffs would likely have a ‘minimal’ impact on inflation and that price pressures are ‘under control’.
Today, the ECB’s meeting minutes are due out. However, other external factors – including EUR’s negative correlation with the US dollar (USD) – could have a bigger impact on the euro.
US dollar (USD) selloff eases although tensions remain
The US dollar steadied somewhat yesterday, although it lost ground against stronger peers, as the recent USD selloff lost momentum.
Concerns over potential US-EU tensions, including around tariff threats and the dispute over Greenland, lingered but failed to trigger further heavy selling.
Looking ahead, USD investors may focus on the latest core PCE price index today. If the Federal Reserve’s preferred measure of inflation shows price pressures remained stubbornly high in November, a pullback in Fed rate cut bets could boost the ‘greenback’.
Canadian dollar (CAD) firms in tandem with oil
The commodity-linked Canadian dollar (CAD) ticked higher against some of its peers yesterday, with CAD boosted by an upward trend in oil prices.
If crude prices continue to appreciate today, the ‘loonie’ could catch bids.
Data releases
07:45 NZD Electronic Retail Card Spending (Dec)
10:30 AUD Unemployment Rate (Dec)
21:00 GBP CBI Distributive Trades (Jan)
22:30 EUR ECB Monetary Policy Meeting Accounts
01:00 USD Core PCE Price Index (Nov)