Australian dollar (AUD) drifts lower as inflation cools
The Australian dollar (AUD) softened yesterday as an unexpected cooldown in Australian inflation in February dampened AUD demand.
Uncertainty around the conflict in the Middle East also subdued the ‘Aussie’. While there are reports that US-Iran negotiations could take place this weekend, Tehran also seemed to reject Washington’s peace proposal.
Looking forward, market risk dynamics and geopolitical developments may be the main drivers of AUD movement today amid a lack of Australian data. We could see more volatility as markets mull the possibility of peace talks.
New Zealand dollar (NZD) subdued amid Middle East uncertainty
The New Zealand dollar (NZD) also trended broadly lower yesterday, as the confusion over proposed peace talks between the US and Iran muted demand for the risk-sensitive ‘kiwi’.
Risk sentiment could continue to determine NZD’s direction during today’s session. Any fresh news around the Middle East crisis could influence the New Zealand dollar.
Pound (GBP) uncertain following CPI release
The pound (GBP) had a mixed performance yesterday, with GBP investors largely brushing off the UK’s latest consumer price index.
Headline inflation held steady in February while core inflation ticked up slightly. However, the data seemed somewhat outdated following the recent surge in global energy prices.
Today, UK economic data is thin on the ground, potentially leaving the pound to trade without a clear trajectory.
Euro (EUR) mixed as ECB comments offset German data
The euro (EUR) also traded without a clear directional bias yesterday.
While hawkish comments from European Central Bank (ECB) Christine Lagarde supported EUR, the upside was offset by a deterioration in Germany’s business climate indicator.
Turning to today, the euro could face headwinds if Germany’s latest consumer confidence index shows that household morale deteriorated heading into April.
US dollar (USD) firms as Iran disputes peace talk claims
The US dollar (USD) gained ground yesterday as uncertainty in the Middle East buoyed demand for the safe-haven ‘greenback’.
The cautious mood came as Iran disputed US President Donald Trump’s claim that the two sides were engaged in talks, with Tehran accusing the US of ‘negotiating with itself’ and calling Washington’s peace proposal ‘excessive’.
The latest US initial jobless claims figure could influence USD today, with a forecast rise in claims potentially denting the currency. Meanwhile, risk appetite could remain a key factor for the ‘greenback’.
Canadian dollar (CAD) subdued as oil prices drive movement
Weaker oil prices initially weighed on the crude-linked Canadian dollar (CAD) yesterday, although CAD regained some ground as oil edged back up in the evening.
With market-moving Canadian data in short supply today, oil price movements may continue to drive the ‘loonie’.
Data releases
17:00 EUR German GfK Consumer Confidence (Apr)
22:30 USD Initial Jobless Claims (21/Mar)