Australian dollar (AUD) hits low point amid geopolitical worries
The Australian dollar (AUD) touched multi-week lows against many of its rivals on Friday, amid mounting anxiety about the crisis in the Middle East and its impact on the global economy.
After US President Donald Trump postponed attacks on Iranian energy sites by another ten days and claimed talks with Iran were going ‘very well’, AUD crawled up from its worst levels. However, it remained on the back foot.
News about the ongoing conflict is likely to continue to impact AUD exchange rates today amid a lack of Australian data. If markets remain downbeat, the ‘Aussie’ could weaken further.
New Zealand dollar (NZD) rebounds but recovery lacks conviction
The New Zealand dollar (NZD) also initially slipped yesterday, with NZD managing to find its footing as the session went on but struggling to stage a meaningful recovery.
In the absence of any domestic data today, global risk dynamics could continue to drive NZD movement.
Pound (GBP) dented by downbeat sales figures
The pound (GBP) softened at the end of last week’s session as new UK retail sales data undermined the currency.
British sales growth contracted 0.4% in February. Although this was less bad than the forecast 0.7% decline, it still stoked concerns about the health of the country’s economy before the war in Iran.
Sterling may struggle to find a clear direction today as UK economic releases are thin on the ground.
Euro (EUR) suffers from stronger USD
The euro (EUR) struggled on Friday as the currency’s strong negative correlation with the US dollar (USD) weighed on EUR demand.
A lack of Eurozone economic data left the currency defenceless, leading EUR to soften.
A decline in Eurozone economic sentiment in March could weigh on the euro today. However, a sharp rise in German inflation later on could provide EUR with support.
US dollar (USD) capped by weak consumer sentiment
The US dollar rose on Friday as the mood remained risk-off, despite Trump trying to soothe markets by delaying attacks on Iran.
However, USD faced some pressure in later trade after the final consumer sentiment index for March showed a deeper-than-expected decline in morale in March.
With US data thin on the ground today, market risk appetite may be the key catalyst for USD. Ongoing anxiety around the Middle East conflict may support the ‘greenback’.
Canadian dollar (CAD) mixed despite rising oil
The crude-linked Canadian dollar (CAD) moved without a clear direction on Friday. While rising oil prices lent CAD support, the currency was unable to push higher against many of its peers.
Turning to today, CAD could remain sensitive to energy market movements. If crude prices continue to climb, the Canadian dollar may enjoy tailwinds.
Data releases
19:00 EUR Economic Sentiment (Mar)
22:00 EUR German Inflation Rate (Mar)