Australian dollar (AUD) tumbles on dire PMIs
The Australian dollar (AUD) slid yesterday following dismal PMI results, which showed Australian private-sector growth contracting for the first time in 18 months.
In addition, a souring market mood put pressure on the risk-sensitive ‘Aussie’.
Turning to today, Australia’s consumer price index for February may have little impact on AUD, unless it deviates from expectations, as it risks appearing outdated amid the recent surge in energy prices.
New Zealand dollar (NZD) falls as Middle East fears return
The New Zealand dollar (NZD) weakened yesterday as risk appetite faded. Iran denied US claims that Washington and Tehran had held talks, which reignited fears about the conflict in the Middle East.
With no New Zealand data due out today, NZD may trade on market risk dynamics.
Pound (GBP) mixed as markets digest PMIs
The pound (GBP) was choppy yesterday, as GBP investors digested the UK’s preliminary PMIs for March.
The surveys revealed a sharp slowdown in service sector activity, including weakening demand and accelerating job cuts. However, they also revealed rising price pressures, which reinforced bets on a more hawkish approach from the Bank of England (BoE).
The UK’s latest CPI is also due out today. Markets may brush off the release, however, as February’s figures won’t reflect this month’s spike in energy prices.
Euro (EUR) uncertain following PMI surveys
The euro (EUR) traded without a clear direction yesterday, with the Eurozone PMIs offering an insight into the early impacts of the Middle East crisis.
While the conflict and subsequent rise in energy prices are stifling Eurozone growth, they are also contributing to inflationary pressures, which may prompt the European Central Bank (ECB) to consider raising interest rates.
Looking ahead, Germany’s latest business climate index could undermine EUR today, if it reveals a collapse in confidence due to the outbreak of war in the Middle East.
US dollar (USD) recoups losses as relief rally fizzles out
The safe-haven US dollar (USD) staged a modest recovery yesterday, after Iran pushed back on US President Donald Trump’s claim that the two sides had held ‘productive conversations’ on ending the war.
These conflicting accounts from Washington and Tehran, paired with ongoing attacks in the Middle East, punctured the relief rally that had taken hold on Monday evening.
American data is thin on the ground today, likely leaving USD to trade on market risk dynamics. Any further shifts in sentiment relating to the Middle East crisis could bring choppy movement for the safe-haven ‘greenback’.
Canadian dollar (CAD) rangebound in lockstep with oil
The crude-linked Canadian dollar (CAD) wavered sideways yesterday, with the ‘loonie’ trading in tandem with wavering oil prices.
Oil price movements may continue to be the primary driver of the Canadian dollar today, with CAD potentially facing volatility if energy markets remain turbulent.
Data releases
10:30 AUD Inflation Rate (Feb)
17:00 GBP Inflation Rate (Feb)
18:45 EUR ECB President Lagarde Speech
19:00 EUR German Ifo Business Climate (Mar)