Australian dollar (AUD) retreats on weak trade data
The Australian dollar (AUD) trended lower through yesterday’s session as a slump in exports led Australia’s trade balance to unexpectedly shrink in January.
This added to existing pressure as the conflict in the Middle East continued to weigh on market risk appetite.
In the absence of any notable domestic data, expect the Australian dollar to remain under pressure today so long as risk sentiment continues to weaken.
New Zealand dollar (NZD) slides in risk-off trade
The New Zealand dollar (NZD) also struggled on Thursday as the downbeat market mood led investors to shun the risk-sensitive currency.
Looking ahead, movement in the ‘kiwi’ will likely remain tied to market risk dynamics today.
Pound (GBP) edges higher amid energy price implications
The pound (GBP) traded with modest support against most of its peers yesterday as GBP investors continued to price in the potential implications of the sharp rise in energy prices.
While most analysts believe potential inflationary risks will discourage the Bank of England (BoE) from making further interest rate cuts in the short term, they are also worried about the potential adverse impact on the UK’s fledgling economic recovery.
With notable UK economic releases in short supply, the pound may be left to trade without directional bias today.
Euro (EUR) slides following retail sales shock
The euro (EUR) remained muted on Thursday after the Eurozone’s latest retail sales figures reported an unexpected contraction in consumer spending at the start of the year.
This fed into wider weakness in the single currency yesterday as rising European energy prices continued to unsettle EUR investors.
Coming up, the euro may face additional headwinds today, as economists forecast Germany will report a sharp decline in factory orders in January.
US dollar (USD) bolstered by geopolitical uncertainty
The US dollar (USD) trended higher through yesterday’s session as uncertainty surrounding the war in the Middle East continued to underpin the safe-haven currency.
The latest US initial jobless claims also supported these gains, after they reported new claims held at 213,000 last week.
Turning to today’s session, the release of last month’s US payroll figures will be the primary focus for USD investors, with the US dollar potentially reversing some of its recent safe-haven gains if the US jobs market cooled as forecast in February.
Canadian dollar (CAD) bolstered by rallying oil prices
The Canadian dollar (CAD) maintained a positive trajectory on Thursday as it continued to be underpinned by rising oil prices.
Coming up, in addition to further oil-linked gains, the ‘loonie’ may also be strengthened at the end of this week by an uptick in Canada’s latest Ivey PMI.
Data releases
17:00 EUR German Factory Orders (Jan)
20:00 EUR GDP (Q4)
23:30 USD Non-Farm Payrolls (Feb)
01:00 CAD Ivey PMI (Feb)