Australian dollar (AUD) jumps on RBA Bullock remarks
The Australian dollar (AUD) closed last week’s session on a high, drawing support from remarks by Reserve Bank of Australia (RBA) Governor Michele Bullock.
Speaking on Friday, Bullock reiterated the bank’s concerns about sustained inflationary pressures, stoking bets the RBA will deliver another interest rate hike as early as May.
However, the ‘Aussie’ may struggle to build on these gains if market risk appetite falters at the start of this week.
New Zealand dollar (NZD) underpinned by AUD strength
The New Zealand dollar (NZD) followed the ‘Aussie’ higher on Friday, amid speculation that a more hawkish RBA may also encourage the Reserve Bank of New Zealand (RBNZ) to tighten monetary policy.
Looking ahead, limited domestic data is likely tie movement in the ‘kiwi’ to market risk dynamics at the start of this week.
Pound (GBP) climbs on BoE Pill comments
The pound (GBP) ticked higher at the end of last week, recouping some of Thursday’s losses following comments from Bank of England Chief (BoE) Economist Huw Pill.
Pill warned against the bank ‘drawing too much comfort’ from an expected fall in inflation, suggesting that this dip is likely to be driven by temporary factors.
Turning to the start of this week, the absence of any notable UK economic indicators may leave the pound to trade without directional bias today.
Euro (EUR) dented by German industrial disappointment
The euro (EUR) faced headwinds on Friday, following the release of weaker-than-expected German industrial data.
December’s data reported a 1.9% decline in industrial production, raising fresh concerns about the resilience of the Eurozone’s largest economy.
Meanwhile, the euro may be left adrift today amid a lull in upcoming Eurozone data.
US dollar (USD) dented by positive risk flows
The US dollar (USD) trended broadly lower, with the currency losing ground amid a tentative recovery in risk appetite.
This downturn in USD came despite an unexpected improvement in US consumer sentiment this month.
USD investors may be wary at the start of this week’s session as they await key US payroll and inflation figures that could impact bets for a Federal Reserve interest rate cut in March.
Canadian dollar (CAD) firm as unemployment slides
The Canadian dollar (CAD) strengthened on Friday, as CAD investors welcomed a surprise fall in Canadian unemployment last month.
Coming up, the ‘loonie’ may maintain this positive momentum if oil prices continue to trend upward at the start of this week.