Australian dollar (AUD) choppy following RBA minutes
The Australian dollar (AUD) faced some volatility yesterday in the wake of the Reserve Bank of Australia (RBA) meeting minutes.
While the minutes showed unanimous support for February’s interest rate increase, policymakers struck a more cautious tone about the need for further hikes.
Turning to today, Australian economic data is in short supply, potentially leaving the risk-sensitive ‘Aussie’ to trade on market sentiment.
New Zealand dollar (NZD) fluctuates amid volatility
The New Zealand dollar (NZD) traded in a wide range yesterday amid market volatility and a shifting appetite for risk.
Today, the Reserve Bank of New Zealand (RBNZ) is expected to hold interest rates steady and strike a more hawkish tone than at previous announcements, which could support NZD. However, it also sets the ‘kiwi’ up for a fall if the bank sounds more cautious that anticipated.
Pound (GBP) plummets amid BoE rate cut bets
The pound (GBP) plunged yesterday as troubling UK employment data cemented bets for a Bank of England (BoE) interest rate cut in March.
The latest jobs report showed unemployment rising to a five-year high in the three months to December, while wage growth slowed to its lowest level since August 2024.
Sterling could come under additional pressure today with the release of the UK’s latest consumer price index. If inflation cools, as expected, markets could price in a faster pace of policy easing from the BoE.
Euro (EUR) volatile amid mixed factors
The euro (EUR) faced turbulence yesterday, with EUR coming under pressure as Germany’s ZEW economic sentiment indicator unexpectedly declined.
However, the single currency’s downside was offset by a risk-off market mood, which supported it against riskier peers, and cautious optimism around Russia-Ukraine peace talks in Geneva.
Eurozone economic data is absent from today’s calendar. As a result, the euro may be mainly influenced by geopolitical developments and its negative correlation with the US dollar (USD).
US dollar (USD) buoyed by upbeat jobs data
The US dollar firmed against many of its peers yesterday, as new US jobs data contained indications of a resilient labour market.
The latest ADP weekly employment change figure printed at 10,250, up from 7,750 in the previous period, marking the third consecutive week of rising US employment.
Looking ahead, a forecast 2% contraction in durable goods orders in December could pressure the US dollar today.
Canadian dollar (CAD) struggles as oil prices wobble
The Canadian dollar (CAD) edged lower yesterday, as the crude-linked currency traded in tandem with oil prices.
Crude prices may drive CAD movement again today, amid a lack of Canadian data. If oil softens, the ‘loonie’ could suffer further losses.
Data releases
11:00 NZD RBNZ Interest Rate Decision
17:00 GBP Inflation Rate (Jan)
23:30 USD Durable Goods Orders (Dec)
00:15 USD Industrial Production (Jan)