Australian dollar (AUD) turbocharged by hawkish RBA remarks
The Australian dollar (AUD) surged to multi-year highs yesterday as markets increased their bets on another Reserve Bank of Australia (RBA) interest rate hike next week.
In a podcast interview posted Wednesday, RBA Deputy Governor Andrew Hauser struck a hawkish tone. He warned that inflation is ‘too high’ and that the crisis in the Middle East could push it even higher.
RBA bets could continue to underpin the ‘Aussie’ through today’s session, while market risk appetite will also likely play a part in AUD’s performance.
New Zealand dollar (NZD) wavers amid volatile trade
The New Zealand dollar (NZD) fluctuated yesterday as geopolitical uncertainty continued to infuse markets with volatility.
Turbulence in the currency market could continue to undermine the ‘kiwi’ today, particularly if we see any shifts in market risk appetite.
Pound (GBP) mixed in absence of data
An ongoing lack of UK data saw the pound (GBP) trade in a wide range yesterday.
Sterling was also mixed amid the uncertainty around the impact of the current Middle East crisis, which could affect UK growth, interest rates, and government debt.
Looking ahead, Bank of England (BoE) Governor Andrew Bailey is due to speak later today. If he suggests that the recent spike in oil prices could deter the bank from cutting interest rates again soon, Sterling could climb.
Euro (EUR) slips as USD strengthens
The euro (EUR) weakened yesterday as EUR suffered from its strong inverse relationship with the recovering US dollar (USD).
In addition, a fresh rise in energy prices weighed on the common currency, amid fears of how an energy shock could harm the Eurozone economy.
With Eurozone economic data thin on the ground today, EUR could be influenced primarily by its negative correlation with USD and wider market trends.
US dollar (USD) firms as sentiment sours
The US dollar initially slipped yesterday, trimming some of its overnight gains, as market risk sentiment shifted.
However, USD was then able to recover during the European session as signs of intensifying conflict in the US-Israeli war on Iran soured the market mood.
Aside from the latest initial jobless claims figure, global risk sentiment could drive USD today. Developments in the Middle East could determine the market mood.
Canadian dollar (CAD) mixed as oil wavers
The crude-linked Canadian dollar (CAD) was mixed yesterday as choppy oil prices saw the currency waver.
With market-moving Canadian data in short supply today, CAD could trade on oil prices once again. Any further volatility could see the ‘loonie’ trade without a clear direction.
Data releases
10:00 AUD Consumer Inflation Expectations (Mar)
19:30 GBP BoE Gov Bailey Speech
22:30 USD Initial Jobless Claims (07/Mar)