Australian dollar (AUD) retreats as risk appetite fades
The Australian dollar (AUD) initially edged higher yesterday amid a cautiously upbeat market mood.
However, sentiment soured during the European trading session, amid signs of stubborn US factory gate inflation and US-Israeli strikes on Iranian energy assets. As a result, AUD retreated.
Turning to today, Australia’s latest jobs report could influence the ‘Aussie’. Signs of a healthy labour market could underpin the Australian dollar.
New Zealand dollar (NZD) weakens amid market anxiety
The New Zealand dollar (NZD) also came under pressure late in yesterday’s session as the shift to risk-off trade dampened NZD demand.
The ‘kiwi’ could struggle again today after new data showed that New Zealand GDP growth slowed in the fourth quarter of 2025.
Pound (GBP) subdued as BoE decision looms
Yesterday the pound (GBP) continued this week’s trend of trading without a clear direction, as UK economic data remained thin on the ground.
Sterling was also muted by the Bank of England’s (BoE) looming interest rate decision, which is due to be announced tonight.
The session ahead starts with the UK’s latest jobs data, with rising unemployment potentially undermining the pound. Focus then shifts to the BoE decision. If policymakers sound concerned about upside inflation risks, GBP could firm.
Euro (EUR) firms amid Eurozone CPI
The euro (EUR) gained ground against its weaker rivals yesterday in the wake of the Eurozone’s final consumer price index for February.
Although the CPI figures printed in line with preliminary estimates, the uptick from 1.7% to 1.9% showed that inflationary pressures were rising even before the conflict in the Middle East saw energy prices spike.
Looking forward, the European Central Bank (ECB) decision today could support EUR, if the bank indicates that it’s wary of how higher energy prices could feed through into inflation.
US dollar (USD) boosted by hot PPI print
After an uncertain start yesterday, the US dollar (USD) strengthened later in the session following the release of the latest US producer price index.
PPI leapt in February, indicating that inflationary pressures were building before the Iran war began, thereby prompting more hawkish bets ahead of the Federal Reserve interest rate decision.
With the Fed decision now out the way, USD may take its cues from market risk appetite over the coming session. Could a gloomy mood see the US dollar push higher?
Canadian dollar (CAD) regains ground as oil prices rise
The Canadian dollar (CAD) slipped before rallying yesterday, with the crude-linked currency tracking movements in the oil market. This helped CAD avoid losses following the Bank of Canada (BoC) interest rate decision, as the bank highlighted the growth risks of rising global energy prices.
Looking ahead, oil prices could be the primary catalyst for movement in the ‘loonie’ today. Volatility in energy markets could see CAD waver.
Data releases
07:45 NZD GDP Growth Rate (Q4)
10:30 AUD Unemployment Rate (Feb)
17:00 GBP Unemployment Rate (Jan)
22:00 GBP BoE Interest Rate Decision
23:15 EUR ECB Interest Rate Decision