Australian dollar (AUD) firms amid surging commodity prices
The Australian dollar (AUD) rallied through yesterday’s Asian session, drawing support from rising commodity prices and bets for an interest rate hike from the Reserve Bank of Australia (RBA) next week.
AUD then fluctuated in overnight trade as shifting risk appetite infused fresh volatility into the currency.
Australia’s latest producer price index may extend additional support to the ‘Aussie’ today as another rise in factory gate prices in the last quarter of 2025 is likely to reinforce hawkish RBA bets.
New Zealand dollar (NZD) buoyed by inflation expectations
The New Zealand dollar (NZD) trended higher on Thursday, lifted by an uptick in domestic inflation expectations, which underpinned more hawkish Reserve Bank of New Zealand (RBNZ) bets.
The ‘kiwi’ may maintain this momentum today, after data showed consumer confidence continued to improve at the start of 2026.
Pound (GBP) rangebound despite UK-China agreement
The pound (GBP) remained confined to a narrow range yesterday, with GBP investors seemingly unfazed by a series of new agreements signed between the UK and China.
While the UK government sought to play up the significance of the deals signed in Beijing, analysts suggested they would have a nominal impact on the UK economy.
Looking ahead, Sterling may remain adrift through the remainder of the week amid the continued absence of any UK economic indicators.
Euro (EUR) subdued amid ECB easing speculation
The euro (EUR) was muted on Thursday, with recent remarks from European Central Bank (ECB) officials on the strength of the single currency continuing to impact EUR sentiment.
This offset the release of the Eurozone’s latest economic sentiment index, which climbed to a three-year high this month.
Turning to today’s session, the spotlight will be on the Eurozone’s latest GDP print, with the euro potentially stumbling if growth moderated in the last quarter of 2025.
US dollar (USD) risks new lows amid US pessimism
The US dollar (USD) remained on the defensive yesterday as US President Donald Trump’s threat to strike Iran, coupled with ongoing fears of a US government shutdown, led investors to price in additional risk premiums into USD.
Adding to the pressure on the ‘greenback’ was a larger-than-expected increase in US jobless claims last week.
A potential escalation in Iran could trigger further volatility in the US dollar today, as could a possible announcement from Trump on his nominee for the next Chair of the Federal Reserve.
Canadian dollar (CAD) underpinned by rising oil prices
The Canadian dollar (CAD) strengthened on Thursday as the appeal of the commodity-linked currency was bolstered by a sharp rise in oil prices.
If oil prices continue to push to new multi-month highs, the ‘loonie’ may continue to catch bids through the end of the week.
Data releases
07:30 NZD Consumer Confidence (Jan)
10:30 AUD PPI (Q4)
20:00 EUR GDP (Q4)
23:30 USD PPI (Dec)