Australian dollar (AUD) rallies as risk appetite improves
The risk-sensitive Australian dollar (AUD) leapt higher yesterday as a stronger-than-expected consumer confidence index and a risk-on market mood boosted the ‘Aussie’.
Comments from US President Donald Trump cheered markets, as he suggested the war in Iran would end ‘very soon’, sparking a relief rally.
Risk sentiment could drive the Australian dollar again today, amid a lack of domestic data. An upbeat mood could support AUD, while any fresh signs of escalation in the Middle East could trigger cautious trade.
New Zealand dollar (NZD) see-saws despite cheery trade
The New Zealand dollar (NZD) wavered yesterday, initially stumbling before regaining ground amid the increased appetite for risk.
Market risk appetite may remain the driving factor behind NZD exchange rate movements today. Any shifts could infuse the ‘kiwi’ with volatility.
Pound (GBP) uncertain amid lack of data
The pound (GBP) was mixed yesterday, as a lack of UK economic data left the currency rudderless.
The risk-on mood sweeping markets saw Sterling slip against its riskier rivals, while firming or holding steady against safer peers.
British economic data remains thin on the calendar today. As a result, Sterling may struggle to find a clear direction.
Euro (EUR) subdued as German exports slump
The euro (EUR) slipped against its stronger peers yesterday after new data showed a 5.9% contraction in German exports in January, raising fresh concerns about the Eurozone’s largest economy.
However, EUR was cushioned by falling energy prices, which alleviated fears of an energy crisis damaging Eurozone growth.
Germany’s final consumer price index is due out today, although the data may not impact EUR unless it deviates from the preliminary estimate. EUR investors may instead focus on geopolitical events and energy prices.
US dollar (USD) slides amid Middle East hopes
The US dollar (USD) retreated further yesterday as hopes for an end to the war in Iran dampened the safe-haven currency’s appeal.
Although uncertainty remains over the duration of the conflict in the Middle East and the long-term impact on oil prices, the upbeat mood prevailed throughout the session.
Turning to today, the latest US CPI is expected to show that American inflation held steady in February. Any surprises could infuse USD with volatility.
Canadian dollar (CAD) muted as oil prices stabilise
The crude-linked Canadian dollar (CAD) initially dipped yesterday as oil prices continued to retreat from recent highs. However, oil stabilised later in the session, helping CAD find its footing.
The ‘loonie’ may remain tied to oil prices through today’s session. A continued decline could undermine CAD, while the currency could climb if prices creep higher.
Data releases
17:00 EUR German Inflation Rate (Feb)
22:30 USD Inflation Rate (Feb)