Australian dollar (AUD) flat despite upbeat data
The Australian dollar (AUD) moved sideways against its stronger peers yesterday, with the ‘Aussie’ unable to push higher despite a better-than-expected business confidence index for December.
The muted movement came amid an uncertain market mood, which confined the risk-sensitive Australian dollar to a narrow range. However, AUD still managed to hit fresh multi-year highs against the tumbling US dollar (USD).
Today, the spotlight falls on Australia’s latest inflation figures. An expected uptick in inflation last month could boost AUD by reinforcing Reserve Bank of Australia (RBA) interest rate hike bets.
New Zealand dollar (NZD) rangebound amid mixed mood
The New Zealand dollar (NZD) also found itself trading in a tight band on Tuesday, as the lukewarm tone in markets failed to provide NZD with a clear directional bias.
Domestic data releases from New Zealand are thin on the ground today. Therefore, NZD could trade true to its positive correlation with the ‘Aussie’.
Pound (GBP) steady amid quiet trade
The pound (GBP) was flat yesterday as a lack of UK economic data saw Sterling trade sideways.
Markets were also generally calm, further muting the pound’s movement.
Amid an ongoing absence of British economic data, Sterling could once again struggle to find a clear trajectory during today’s trade.
Euro (EUR) stable as calm settles over markets
The euro (EUR) followed in the footsteps of its peers yesterday, trading in a narrow range.
A lack of Eurozone data releases and a subdued tone in markets limited EUR movement, while weakness in the US dollar failed to lift the single currency despite the euro’s negative correlation with USD.
The focus for EUR investors today falls on Germany’s latest consumer confidence index. If morale improved heading into February, the euro could catch some bids.
US dollar (USD) extends selloff amid policy fears
The US dollar was the clear loser yesterday, striking fresh multi-year lows against EUR and AUD, as the recent USD selloff gathered steam.
Investors are growing increasingly wary of the US amid the possibility of another government shutdown, fears of central bank interference, and fresh tariff threats on Canada and South Korea.
Turning to today, USD exchange rates may remain weak ahead of tomorrow’s Federal Reserve policy announcement. Although no change is expected, Trump may time his nomination of the next Fed Chair to coincide with the decision.
Canadian dollar (CAD) languishes at multi-month lows
The Canadian dollar (CAD) wavered near multi-month lows yesterday as souring US-Canada trade relations continued to weigh on the ‘loonie’.
Looking ahead, the Bank of Canada (BoC) will announce its latest rate decision tonight. If the banks holds interest rates and signals that they are at neutral levels, CAD could climb.
Data releases
10:30 AUD Inflation Rate (Dec)
17:00 EUR German GfK Consumer Confidence (Feb)
00:45 CAD BoC Interest Rate Decision